Bankruptcy doesn’t have to be the only answer when you’re struggling with debt. There are many different ways that you can avoid bankruptcy, some of which you can start doing right away.
While there are dozens of options, the four main ways to avoid bankruptcy include:
- Consolidating debts into payments you can afford
- Taking on additional work to earn more
- Settling debts with collection agencies
- Use credit card insurance policies
Each of these helpful methods could help you eliminate the debt that is currently holding you back.
Consolidating your debts can make it easier to pay them. For example, if you owe $15,000 on five credit cards, you may owe $100 to one, $50 to three others and $25 to another as minimum payments. That’s around $275. However, if you can get a personal loan and consolidate them, you may be able to reduce that amount into something more affordable (and with a better interest rate).
Another option is to take on additional work, even if it’s odd jobs, to pay more than your minimums. An extra $35 or $40 a month can go a long way in reducing your debt.
If your debts are already in collections, then settling with the agency may help. Some agencies will settle for 40 or 50% less than what you owe, just to get the debt off their books.
Finally, if you have an insurance policy on your credit card and qualify for the benefits, now is a good time to call the company and see about canceling the remaining debt. Credit card insurance generally cancels debts in the case of death, disability or unemployment.
These are a few ways to address your debt without bankruptcy. One or more of these may be a good fit for your situation.
