If you’re months behind on your bills, can’t make your monthly payments, and are swimming in debt, you need to start making sound financial choices today. One of those choices involves looking for alternatives to avoid bankruptcy.
While you may think bankruptcy is the only way out, it should be avoided at all costs because it negatively affects your future credit, making it nearly impossible to get a mortgage or any type of credit line. Bankruptcy typically stays on your credit report for seven to ten years and can affect many areas of your life. If you’re looking for a new job, it may impact your chances because most employers run credit checks on prospective employees. If you’re a renter, bankruptcy also doesn’t sit well with future landlords.
Many people file for bankruptcy and don’t realize that IRS debt, child support, and student loans do not qualify. These debts will remain in your name regardless if you file for bankruptcy or not.
There are things you can do to avoid bankruptcy and hitting rock bottom.
Sell as Much as You Can
Look around your house and go through items to fish out things you don’t need. You can try to sell these items through online sites or take them to a local consignment shop. You can also try having a garage sale. While this may help bring in some revenue, it likely won’t earn you enough to get out of deep financial debt.
Get a Second Job
If you can, look for another job to bring in extra income. This can help, but also may not be enough to solve your money crisis.
Borrow Money from Family or Friends
Friends and family may let you borrow some money to pay a bill or two, but this is a short-term solution to a long-term problem. Don’t forget, you’re going to have to pay them back too.
Are you living beyond your means? While some people fall into deep debt due to unforeseen events, others find themselves in the same position because they simply spent money they didn’t have.
In order to start to dig yourself out, you need to make sacrifices. This may mean you need to stop eating out or stop going on unnecessary and expensive shopping sprees. Whatever it is, look at your expenses and try to determine where you can start cutting. If you have trouble budgeting, a financial or debt counselor can help you devise a budget that balances out your earnings and spending habits.
Debt Settlement is one of the better options when it comes to avoiding bankruptcy. While working with a debt counselor and attorney, debt settlement allows you to reduce your debt, pay it off, and avoid bankruptcy. Many times, debt arbitrators are able to work with those you owe to reduce your total debt balances. The goal is to get the payments to a level you can afford.
Many times a debt settlement program can be completed in 12 -36 months depending on the amount of debt and type of program. Many creditors are open to debt settlement arrangements because they know they will likely receive little to nothing of the balance owed if someone files for bankruptcy. This way, they can still collect on the debt.
This is another good alternative to bankruptcy. When you opt for debt consolidation, you will work with a counselor to reduce interest rates and reduce multiple debt payments to just one. This type of program allows you to pay off your debts in a payment you can afford and avoid bankruptcy at the same time. It’s important to note that with debt consolidation and debt settlement, the following debt is not eligible:
- Car loans
- IRS tax debts
- Payday loans
- Student loans
The types of debt that are included in both debt consolidation and debt settlement are:
- Credit cards
- Personal loans
- Collections accounts
- Medical bills
- Other unsecured debts
If your debt falls into the eligible categories, you should consider debt consolidation or debt settlement to begin your path to financial freedom. Christian Debt Counselors can help. A Christian debt counselor works on the Biblical principles of honesty, honor, and financial responsibility. Christian debt consolidation programs work on the Biblical belief that a person cannot serve two masters. When someone is in debt, they cannot serve their creditors and God. The only solution is to pay off creditors in order to live a debt-free Christian life.
Christian Debt Counselors work with independent law firms across the country to provide debt negotiation and debt settlement programs that work.
If you are finding it increasingly difficult to pay your debts and would like to learn more about debt settlement and debt consolidation programs, contact Christian Debt Counselors today. Let one of our caring staff members listen to your problems and help you deal with your debt to make responsible financial decisions and get you on the way to financial freedom.