If you are worried about your financial situation, something you may feel you have to do is to enter into bankruptcy. The truth is that there are ways that you can avoid bankruptcy. While bankruptcy can be a wonderful solution, it’s not always the first thing to turn to.
Of the ways you can avoid bankruptcy, some of the most common include:
- Debt settlement
- Debt negotiation
- Debt consolidation
Here’s a little more about each one and how they can help.
1. Debt settlement
Debt settlement involves you settling a debt for less than you owe. For example, if you have a debt of $14,000 with a hospital and have $11,000 in cash that you could apply to the account, you could ask if they would be willing to settle for less in order to resolve the account. You may be surprised, but many creditors will settle to make sure they receive some payment.
2. Debt negotiation
Another option is debt negotiation. Perhaps the debt seems high because it was not billed correctly, or maybe you found that the same services or items cost less elsewhere. You can negotiate with your creditor and ask to reduce what you owe.
3. Debt consolidation
Finally, there is debt consolidation. Debt consolidation takes all of your debts and places them onto one loan. This reduces what you have to pay each month and makes it easy to make a single payment. Many people benefit from doing this, so they save money and pay more on the principal balance of the debt each month.
These are three ways you may be able to avoid bankruptcy. Our website has more on avoiding bankruptcy and the options that may be open to you.