If you are in financial trouble, bankruptcy might be your only way out. It should only ever be used as a last resort to try to pull out of the financial mess you are in. There are several other options to help relieve your debt burden. But if you’ve already tried them all and still can’t keep your head above water, then your next step is bankruptcy.
So you think that you need to file bankruptcy? There are some other alternative options for filing but they do come at a price. And if you are already in over your head, it might be pointless to get yourself even more in debt while trying to pull out of the debt.
There are credit counseling services that will call your creditors for you and help you set up monthly payments. This is a good way to get the creditors off your back, but even if the counselors can negotiate a payment plan with a lower interest rate, you’re still going to be in over your head and you won’t be able to get out until you can afford to start paying off that debt. On top of that most credit counseling services charge a fee for their services. So now that renegotiated interest rate doesn’t mean a whole lot since you’re paying monthly service fees for your counseling.
Interest-Free Credit Cards
If you have decent credit you can try this method of lowering your interest rates by applying for 0% interest credit cards and transferring your existing balances. You might need a few cards, but the trick is to get your debt paid off within the timeframe the bank gives you for the 0% offer. If you don’t you’ll be stuck drowning again.
Debt Consolidation Loan
If you have a lot of lenders that aren’t just credit cards, then you might want to look at getting a debt consolidation loan. This will combine all of your debt into a single easy to manage payment. The key here is that you should not take on any more debt until the debt consolidation loan is paid off. If you do, you will soon be right back where you started. However, some folks are so far in debt that they won’t qualify for this type of loan.
Liquidation of Assets
Do you have a coin or stamp collection that has any monetary value? It might be in your best interest to sell it to pay back your debt. However, you can sell off everything you own and it still might not be enough to pay back all of your lenders.
Famous Folks Who Filed Bankruptcy
If you’re worried about how people may look down on you for filing bankruptcy. Try not to let it get you down. Good, honest, hardworking people file all the time. It’s such a common practice that there are lawyers that specialize in the area. Plus there are so many famous people who have filed for bankruptcy.
Let’s take a quick look at the shortlist:
- Larry King
- Randy Quaid
- Willie Nelson
- Burt Reynolds
- Wayne Newton
- Archie Griffin (Go Bucks!)
- Merle Haggard
- Walt Disney
- Meatloaf (the singer, not the dinner)
- Marvin Gaye
- David Bowie
- Jose Conseco
- Nicolas Cage
- J.C. Penny
- Henry Ford
- Mark Twain
- Oscar Wilde
- Rembrandt (the painter)
- P.T. Barnum
- Jerry Lee Lewis
- Mike Tyson
This list goes on, but you get the point.
Nine U.S. Presidents filed bankruptcy too:
- Thomas Jefferson
- James Madison
- James Monroe
- William Henry Harrison
- Abraham Lincoln
- Ulysses S Grant
- William McKinley
- Harry Truman
- Donald Trump
The Light at the End of Bankruptcy
So you’ve exhausted all attempts of getting yourself out of the horrible financial hole you’re in. There is no other option other than the dreaded bankruptcy. The word is so disheartening and embarrassing. No one ever wants to go down this path. But there is some light at the end of it.
Bankruptcy isn’t the end of the road, but rather a new beginning. It’s a chance to start a clean slate and do things differently. It’s an opportunity for you to rebuild your creditworthiness and it will eventually open some new doors for you. Most of all, it will give you a chance to breathe without having a creditor on your back. You also won’t need to worry about deciding on eating out or saving that money to pay a bill.
There is one thing that can’t be discharged in bankruptcy and that is student loan debt. There is no escaping that one (unless you have like twelve kids and make less than minimum wage). But there are programs that offer loan forgiveness after a period of time. Still, with the rest of your debt wiped out, you should have no problem repaying your student loans.