How to Avoid Filing Bankruptcy

Have you ever felt helpless concerning your financial problems? Are you looking for ways to get out of your current financial situation? You are not alone! Millions of people all around the globe are experiencing the same thing. Others might say the best and easiest way to be free from debt is filing bankruptcy. But what is the real truth regarding bankruptcy? Here are some truths you should be aware of.

Chapter 7 bankruptcy is one type of bankruptcy available today. It offers some benefits like clearing out your unsecured debts. However, you are required to sell your assets to pay any remaining balances. This is a tremendous disadvantage of chapter 7 bankruptcy because you are not allowed to decide what to do with your remaining assets. Instead, the court will seize control and make decisions they think are best to resolve any debts.

This process usually does not work in favor of the debtor. Filing for Chapter 7 bankruptcy is also very difficult because of the new laws implemented in 2005. In most cases, it is impossible to even qualify for because of the complexity of the process. To avoid wasting your time, and money, it is best to look for other effective options.

On a different note, Chapter 13 bankruptcy is easier to qualify for. This is another type of bankruptcy which will also take over the control of your finances and assets.

True, the people in the courts might have more knowledge and experience in handling these sort of matters, but no one wants to give away their rights, power, and money to someone else. You will also be obligated to pay them for these “services” and will be bound to pay them regardless of the turnout. Is this the kind of solution you want?

There is a better option to be free from debt. Get disciplined with your finances and watch every penny you spend. And if you need help, consult with a certified debt counselor. Using a knowledgeable and experienced service provider to guide and assist you can be a great ally in your battle against debt.

This process allows you to learn and gain full control of your finances and offers step-by-step counseling, techniques, and materials to guide you out of your financial troubles. This gives you a long-term solution for debt resolution not just a “quick fix” that will haunt you and your credit for years to come.

Additional options to explore are debt consolidation: a process in which all your debts can be consolidated under one convenient monthly bill.

And debt settlement: a process in which your overall debt can be negotiated typically up to 50% to enable you to pay off the debt in full.

For more details, speak with a certified debt specialist in your area or by calling for a free no-obligation debt consultation through the number at the top of this page.

19 thoughts on “How to Avoid Filing Bankruptcy

  1. The real question of course is, how do I get my wife to get financial discipline! As a married man, my finances is not my own, it is conjugal.

    1. Communication is the key! And it may take repetitive communication and gradual changes, but it can be done.

  2. Thank you for this post. It is amazing how many people feel that bankruptcy is their only option. I particularly am curious as to what financial tips you would give a young person, like myself, who is stepping out into the world for the first time to remain debt free?

    1. Hi Kayla, I would say learn how to respect money and it will respect you. It doesn’t matter how much money you have, if you spend more than you earn or have, then it will eventually run out. Simple as that.

      Also, use cash for many things, but quite honestly I feel it’s wiser to learn how to handle and leverage credit. We live in a credit driven society and cash really is no longer king, plastic is! So it’s advantageous to start building up your credit rating gradually while you’re still young so that you can be financially set earlier rather than later. But don’t get in over your head, perhaps just start with one credit card, store card, gas card (or other arrangement that reports your good payments to the credit bureaus) and then gradually add on more credit lines and build up from there.

      If you use, manage and leverage credit wisely, you can enjoy a lot of benefits and added perks such as bonus points that you can translate into cash to offset you bill, lower interest rates, free airline & travel miles, deferred payments and more. Not to mention all the respect and confidence you will have just by being able to walk into any business and flash a high credit score and watch them cater to you:) Cash is cool, but mere cash just can’t complete with all the benefits that credit can offer you.

      Many people think credit is bad because they either got caught up in the web of debt, are old time thinkers, or they’ve been told it was bad. But credit is not bad if you learn how to handle it and manage it responsibly. So regardless of what you may think about credit, it’s the world we live in and it’s not going anywhere, so make it work for you and the world will open up to you.

    2. Very helpful. But it’s easier said than done. It is so hard to discipline oneself when it comes to spending.

      1. For some it’s hard; for some it’s not. But it’s gotta be done. If you can’t do it, then have someone else do it for you and give you an allowance;)

  3. Recently when during the financial crisis many people lost their homes. I think what prevented so many people from losing them and becoming homeless was because they filed for Chapter 13. If it is your only home they can’t take it away from you. It’s always good to speak to an attorney to see if you qualify and if you should file for bankruptcy at all.

  4. Pointing out different ways to manage debt other than filing for bankruptcy is great. The best solution is to learn
    how to manage debt instead of just wiping the debt clean and starting fresh. Why sweep your debt problem under the rug by filing for bankruptcy when learning how to manage debt can fix the problem indefinitely?

  5. It is good to see that there are other options out there for people who are in debt that will not cause them a lot of money. This is a helpful resource to know about someone who is struggling with their financial situation. I would like to know if there are any other options for people in this situation.

  6. Excellent concise artical, all common sense options are explained in plain English! Most
    People find legal processes daunting and are easily put off. I will be researching debt consolidation
    In more detail.

  7. Hello. It is great that you are giving people options. However, are these our only options? As a person with somewhat a “financial situation”, I think it is important to know what all our options are so we have our say. I know these can be consulted with our debt specialist and I am really quite interested with consulting with one. However, are these really all our options?

    1. Basically, yes. These are the options worth mentioning. There could always be other ways out of debt like perhaps you could try hitting the lottery an other things. You get the point:)

  8. I am happy to see that you are showing people they have options. All too often the average person when in financial debt, they feel like the only option is bankruptcy. Thank you for the honesty!

  9. It is great that you discussed about Chapter 7 and Chapter 13! I was always unsure of the after process of filing for bankruptcy! Going into detail about the other way to avoid it is amazing and shows that you care a lot!

    1. Thanks for your comment Tim. Yes, bankruptcy should definitely be your last resort. I can’t stress this enough.

  10. My father had a principle of “Don’t buy unless you have more than half of what it costs”, when we were small. As much as it annoyed be back then, it makes so much more sense now. I won’t agree to more than half part, but yes, we should always always be very careful before getting into debt. Its a vicious circle to break. Be careful of your income and planning your expenditure accordingly is always the key.

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