Keep in mind that filing for bankruptcy can inflict severe damage to your personal credit history. Hence, if you’re planning to file for it, in the coming months, we suggest you consider the following options, first:
Try debt reorganization. This often involves visiting credit agencies that offer debt consolidation and other credit busting options and choosing a program that suits your needs and budget. Signing up for debt consolidation can actually work to your advantage. Apart from helping you pay off your existing financial obligations, such programs can also help you rebuild your credit history. In fact, if you will resolve to keep up with your monthly repayments, you can see dramatic improvements in your credit history. In time, your responsible payment activities will help you regain your creditworthiness and soon enough, you can look forward to receiving affordable credit offers.
Sell valuable items you own to help pay off your debt. Do you own valuable assets, like real estate properties, cars, or parcels of land? If you do then, why not sell some of them and use the cash you will receive to settle your debt once and for all? Keep in mind that selling some of your properties can turn out to be a better alternative to undergoing bankruptcy proceedings. After all, you could lose everything to bankruptcy. Moreover, you can receive better offers from interested parties for the assets you’re planning to sell. In fact, you may soon receive ample funds you can use, not only for paying off your debts, but also for starting over.
Look for additional income streams, which will let you earn additional cash you can eventually use for covering your monthly dues. Keep in mind this can be just a temporary job tat you keep until you are out of debt. Be wary of get rich quick schemes. Desperation often leads to taking chances you ordinarily wouldn’t take. When you look online there are a lot of companies advertising work at home solutions. Some are legit and some are as phony as a $3 bill! If you need to “buy supplies” from them in order to work for them. Its most likely a scam!
Some people take this time to try to start a business. If you are already in debt you need to find something that has a very low cost to start. When I got out of college I started a drop shipping business to help me pay off credit card and student loan debt. It worked very well for me and I did that for several years as a side business. You just need to have access to companies that offer drop shipping and you can resell their products on your website, social site, or Ebay. I even put together a little catalog I would ship out from a leads page I had online. I made it at home using a binder that I paid $200 at the time for. It more than paid for itself!
Another low cost business to consider is opening a consignment shop for your friends and neighbors. If you are good with words you can offer to set up ads on craigslist, ebaby, amazon and the like and resell your friends and neighbors belongs. You can make them pay all the fees up front and you manage taking the pictures of the items, posting (and re-posting) them, obtaining the payment and eventually shipping the item out to the winning bidder! You can charge a 50% of the sale item price w/ all fees paid by either the owner of the property or the winner of the auction!
Only consider starting your own business if you are a disciplined person. Once I started making money in my business, everyone wanted me to show them how to do it. I wasted a lot of time showing family and friends how to start their own drop shipping business. So many of them came by for a weekend or two for us to work together but when they didn’t make money right away they quit. If you know that’s you (and their is no shame in that!) you are better off finding a job that you can work at after your main job and on weekends.
Be ready to negotiate. Don’t be embarrassed or too shy to ask for a lower interest rate, more flexible payments terms, or for a longer repayment period with your creditors. After all, most creditors would rather help you find a way for you to pay so that they can get their money back. Filing bankruptcy means they won’t get anything back, so its a lose – lose situation since your credit will be adversely impacted. Also remember to ALWAYS get things in writing. Don’t do any “handshake” or verbal deals .
Understand the provisions of the local, state or federal laws, most especially the stipulations directly involved with bankruptcy proceedings. This way, you can understand the pros and cons of filing bankruptcy. You will know what the legal steps are; and you can realize whether or not filing for bankruptcy will meet your expectations and suit your needs. .
Melanie Mathis is a credit analyst and a writer for 8 years. She has been participating in the programs of http://www.newhorizon.org such as their continuous effort in giving out Free Credit Repair Tips.