Most people will experience some type of financial hardship at some point in their life. If they are unable to pull things together financially, they may be headed toward bankruptcy. While bankruptcy is sometimes the only answer, and can be helpful in some situations, it should generally be avoided if at all possible. The following are some options you may not have considered for pulling back from the brink of bankruptcy in your life.
Settle With Creditors
Creditors will be able to see that you are falling behind on your bills, and will know that bankruptcy is an option. If you enter into bankruptcy, they will lose a lot of their options for collecting the money they are owed and may end up losing out big time. With this in mind, they may be willing to settle for less than the full amount they are owed. If you are able to put some money together, you may be able to negotiate a settlement outside of bankruptcy court that can help put you on the right financial path forward. If you are looking to settle with creditors, it can be helpful to have an attorney working on your behalf. Contact The Law Office of Ray Garcia to get the help you need with this option.
Sell Assets
If you have any type of assets that you are able to sell, it may be a good way to help clear off a lot of your debt. A cottage or vacation home, for example, can generate the money needed to get caught up on your bills. Even selling an extra car, collections, or anything else of value can be very helpful. While it may be difficult, you may be forced to sell these items in bankruptcy anyway, so it is better to do it on your own terms.
Borrow Money
Borrowing money may seem like a bad idea in this type of situation, but if it is done right, it can be very helpful. For example, if you are able to borrow money from your parents without interest, it can help you to get some debts paid off quickly with a reduced monthly payment. Many people are also able to borrow from their 401(k) accounts, which can help you to recover from the risk of bankruptcy.
Get Serious About Sacrifices
Even if you do some of the other options listed above, it is likely going to be necessary to make some serious cuts to your expenses. The risk of bankruptcy can help to ‘scare’ people into making the hard sacrifices that are needed. Consider cutting cable, reducing your phone plan, or cutting any other non-essential expenses so you have the money to direct toward your debt.
Law Office of Ray Garcia, P.A.
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