Many people feel that when a person files for bankruptcy, they are forced to because they have allowed their finances to get out of control. Unfortunately, the reality is that most people file for bankruptcy because the debt they have has become too great for them to repay. Sometimes, the loss of a job, a death in the family or a medical issue, completely out of their control has led to them being unable to repay their debts. In these situations, bankruptcy can be extremely beneficial.
Debt Consolidation Loans
It is worth noting that most legal experts caution against using bankruptcy as anything other than a last resort. The good thing is there are other options to consider before even thinking about bankruptcy.
Sometimes a person can meet with a debt relief attorney and can find other avenues for dealing with their out-of-control debt apart from filing for bankruptcy. Sometimes, if a person’s credit hasn’t been damaged too badly, they can apply for a debt consolidation loan. This can help them to boil all their debt payments down to one monthly payment. Depending on the interest rates of the various debts, they may actually be able to save money with a lower consolidation loan interest rate than the average interest rates of all of their debts calculated together.
Another option is to work with an attorney through a credit counseling process. This is where a client’s various creditors are contacted and the credit counselor or the attorney negotiates with the debt holders to obtain lower interest rates, restructure monthly payments and help their clients get back on track without having to file for bankruptcy. This is good for credit debt, auto loans, and even mortgage loans.
While it may be true that filing for bankruptcy could potentially be the only option, it will be important to look at other options beforehand to see if any one of those will work. They may be far less complicated, expensive and damaging to your credit than going through the bankruptcy process. If you’re having a financial crisis and you’re looking for a way out, you may want to Click here for help.