Barring Bankruptcy - How To Solve Your Debt Problems Without Having To Declare Yourself Bankrupt

By Author: J.J. Yong
Total Articles: 963
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One word that comes to mind when people think of debt problems is the word bankruptcy. But in actual fact, it's not the only option available for dissolving your debts and should be only considered as a last resort. Here are some other steps that you should take before deciding to declare yourself bankrupt:

Get your facts and figures straightSet aside a time to sit down and analyse all the information you have on hand. Collect all relevant documents for review, for instance those detailing what you currently owe your creditors and also a copy of your most recent credit reports from the credit bureau. Calculate your outstanding debt amount and compare this to how much money you have on hand (savings as well as income). Then decide how much you can reasonably afford to repay - either in a lump sum or at regular intervals, for example, every month or year.

Consider what alternative methods are available to youCarefully contemplate what methods you can utilise to solve your current predicament and then decide on which one you will use. Some of the possible options that you can consider include the following:

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... Debt settlement: This is where you negotiate with creditors for the debt to be settled via the payment of an agreed amount, which is usually lesser than the original sum that you owe them.

Debt management/credit counselling: This involves a third party assisting you with the calculation of your repayments as well as conducting negotiation efforts with creditors in order to reduce or eliminate interest on the outstanding debts.

Debt consolidation: For this option, what you are essentially doing is taking a loan to repay your existing debts. The rationale behind doing this is to secure a lower or fixed interest rate.
Forbearance: An agreement with creditors for a certain period of reprieve from paying the loan concerned.

Put action to your plansAfter you have chosen which of the above methods you prefer, you now need to start taking the necessary action required on your part to get it done. This may involve you having to write a debt settlement letter, conduct an independent research on which third parties you may want to contact for help (for example, debt settlement companies), make calls to creditors to initiate negotiation and so much more. Be realistic about what is achievable for you, and make provisions for alternative courses of action should your original plans fail for some reason.

Keep a detailed set of recordsIn order to protect yourself in the event of any sort of dispute or legal action taken against you, make effort to constantly keep a record of all actions and correspondence occurring between you and your creditors. Request for signed documents to accompany any verbal agreements that have been made. Sort and file all relevant documents in a location that's secure and easily accessible to you.

Begin setting aside the money you will pay to creditorsNo matter what method you opt for to settle your debts, it mostly involves some form of repayment to your creditors, so it would be wise for you to start setting aside the money you need to do this. Even if you can't obtain the entire amount you need right away, it's good to begin making provisions for it.Based on the steps given above, it is clear that there are many possible courses of action you can take before you finally decide to declare yourself bankrupt. It is advisable that you consider these options first, since filing for bankruptcy can have serious implications for you in the future.
For more information about debt settlement online, visit DebtSettlementChoice.com.