Times are tough-in 2009 alone Michigan consumers filed 67,265 bankruptcies. While Chapter 7 bankruptcy offers a fresh start and Chapter 13 provides a way to repay your debts, every bankruptcy affects your credit standing and your future ability to obtain credit.
Reducing consumer debt
Alternatives to bankruptcy may be a better solution and ultimately rehabilitate your credit faster than filing bankruptcy. Consider the following -
Selling Assets - If you are in a situation where it is becoming increasingly difficult to pay your bills, consider selling some of your assets. Even if you only end up with enough money to pay off one or two debts, it still puts you in a better financial situation. Many of us have valuable items we do not need or use and can find selling venues like Ebay, Craigslist, yard sales, or estate sales. Make budget cuts - By cutting out unnecessary expenses in your budget you can increase your disposable income and put that extra money toward your debts. Consider reducing or eliminating paid cable services, dining out, expensive cell phone contracts, magazine subscriptions, and other non-essential expenditures. Talk to your creditors - So many people are going through tough financial times that creditors are becoming more agreeable to working out new payment plans, reduced interest rates, or debt settlements. Some credit card companies even offer hardship programs. However, before agreeing to a hardship program, make sure your monthly payment and interest rate actually go down.
Filing Bankruptcy, Consumer Bankruptcy, Bankruptcy Software For Attorneys,
Steps for businesses to reduce debt
For businesses trying to avoid bankruptcy, the following steps may help:
Hire a professional to develop a financial plan to negotiate with and pay off your creditors. Issue additional shares to help generate capital. However, a stock split does dilute the share value and must be agreed upon by a majority of your shareholders. Offer to exchange part of your debt for creditor equity in your company. Change your equipment, health care, and benefit providers to decrease operating costs. Liquidate unused assets and equipment for cash. Make lay-offs and additional cut-backs.
Legal advice if you must file bankruptcy
If after doing all of the above, you still find that bankruptcy is your best option, contact a qualified bankruptcy lawyer. He or she can advise you on the appropriate method of filing and how best to protect your assets in a bankruptcy matter.
National Association Of Consumer Bankruptcy Attorneys
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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