It should come as no surprise that many Americans carry significant debt, including student loans, mortgages, credit cards, and auto payments. Many people may find themselves spread thin, struggling to make payments for their financial obligations. This can lead to many considering how they can dig themselves out from under mounting debts. While bankruptcy may be an option, debtors should look for alternatives to bankruptcy before filing. There can be alternative options, and it’s crucial to conduct the necessary research. Taking immediate action with the assistance of either a financial advisor or a lawyer is imperative because failing to pay debts can not only be stressful but come with consequences when deadlines for payment are not met. Sometimes, despite best efforts, it may be necessary to consider bankruptcy as an option. We know that this is an incredibly stressful time, and there can be a lot weighing on your decision, which is why contacting our lawyer at Allmand Law Firm, PLLC for guidance is essential. 


Understanding Alternative Options to Bankruptcy

No person truly wants to file for bankruptcy, and before reaching this decision, exploring alternatives to bankruptcy will be imperative. There may be other ways to manage debt and preserve credit scores without the mark that a bankruptcy filing can put on your credit. Some alternative options to explore before filing for bankruptcy include:


Consider a Non-Profit Debt Counselor

While many debt settlement companies offer the allure of settling debts, it’s essential to know that these services can come at some expense. Instead, start by researching the options for a non-profit debt counselor. These agencies offer their services free of charge to help develop a budget, save for retirement, and more. Trained professionals will work with debtors to discuss their financial situation at length and establish a clear plan for managing debts. In some cases, a counselor may recommend that you sign up for a debt management plan, resulting from having too much debt that debtors are unable to pay. A debt management plan may be an opportunistic way of managing debts and resolving them in a more timely and manageable way. 


Negotiate with Credit Card Companies

Credit card debt is a common reason people file for bankruptcy. High-interest rates and making minimum payments can feel as though a person will never be able to pay off their debts. In some cases, obligations may be so extensive that a person will never resolve the debts they are contending with. However, if you default on payments, negotiating with credit card companies may be an option. While there are debt consolidation companies that can assist with negotiations, it may be possible to tackle negotiations on your own. Credit card companies may be willing to reduce interest rates or settle debts. After 180 days, your debt may be written off as a loss, but credit card companies may be ready to settle for much lower than your financial obligations. 


In some cases, some alternatives can help debtors dig themselves out from mounting debt. However, if a person has exhausted all options and consulted with a financial advisor, in some situations, bankruptcy may be the most appropriate way to move forward. 


Choosing Bankruptcy

Sometimes, debtors may manage their debts without resorting to bankruptcy, which is why exploring the options should be one of your top priorities. However, despite best efforts, bankruptcy may be the most appropriate option. Taking the time to review your debts and your specific situation is essential. Our experienced bankruptcy lawyers are prepared to provide straightforward, well-informed guidance for next steps that should be taken.