What to Do When Bankruptcy Isn’t the Answer

What to Do When Bankruptcy Isnt the Answer

I remember it like it was yesterday. I was facing over $45,000 in debt. My credit cards were maxed out and I had nowhere to turn. Bankruptcy, or so I thought, was the only real way out. It provided, on one level, a clean slate. I would no longer be shackled to debt and could live freely.

It was the tough love of a roommate that steered me away from bankruptcy. The message he gave me was one I knew but did not want to admit. I, and I alone, made the decisions I did. Declaring bankruptcy, for me, was the easy way out. Like it or not, I soon realized paying off debt is not easy – hard work was going to be required.

My story is not all that unique. There are over 1 million people who file for bankruptcy every year, with countless others struggling with debt. However, not everyone can or should declare bankruptcy. In my case, I did not have the money needed to file the paperwork. Your situation is likely different. Regardless, there are options available if bankruptcy isn’t in the cards for you.

Start Paying Down the Debt

This is the first and most obvious answer. It’s also the most important answer, though not always the easiest one to consider depending on your circumstance. Personally speaking, I had no clue how I was going to start knocking down the debt. There was one simple reason – I was financially illiterate and was earning very little. I had to seek help to start. That was the first step.

I know it may seem difficult to start paying on your debt. You may be overwhelmed or uncertain. Don’t let that hold you back. Simply take a step towards improving the situation. That may include meeting with a debt counselor. It may mean picking up a part-time job. The point is to start with one step. That will help build momentum you can use to kill your debt in the long run.

Why Do People File for Bankruptcy?

There are many reasons people file for bankruptcy. Sadly, many of those are thanks to medical expenses. Beyond medical expenses, people file for bankruptcy for a variety of reasons. Some of those are unexpected though many of them are due to self-inflicted circumstances, as was the situation in my case.

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The key here is to determine your reason. If it’s something you can correct, determine how you can correct the situation and begin to move forward. This may not be possible in every circumstance. That’s ok. Find ways to move forward and climb out of debt.

Find Ways to Make it Easier on Yourself

Dealing with significant debt is not easy. Anyone who tells you it is is fooling themselves. Debt restricts freedom. It enslaves you to someone or something else. If you determine that bankruptcy is not best for you, you need to find ways to lessen your load while maximizing your debt payoff efforts.

This, of course, will depend on the type of debt you have. That being said, you may have a variety of options available to you. If you have consumer debt, you might be well served to get an unsecured loan to lower your overall interest payments.

If you have a relatively decent credit score, and have credit card debt, you may also consider a balance transfer card for relief. These are just a few of the options available to you. The point is to find ways to make it easier on yourself so the debt doesn’t feel so insurmountable.

No Looking Back

Struggling with debt is a challenge, especially if you’ve considered bankruptcy. You may want to focus on the mistakes you made and condemn yourself. I know I was guilty of that. There is certainly a time and place for analyzing the “why” behind your situation.

There is also a time to leave that analysis behind and attack your debt. This is the mentality you want to keep. Focus on what killing the debt will mean for your future. Speaking from experience that was one of the biggest drivers to achieving my debt freedom.

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  • Many people try to borrow their way out of debt by looking for a debt consolidation loan or zero APR credit card but you need good to excellent credit for both of those options to be feasible. You could also look at credit counseling or debt settlement – doing it on your own or hiring a reputable company to help settle with your creditors. Those are better options that don’t hurt your credit for many years like bankruptcy.

  • Kate

    It takes time, sacrifice, and patience, but it works.

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