Part of what I do as a bankruptcy attorney is to counsel my clients or potential clients about their alternatives to bankruptcy. Here are 5 alternatives to bankruptcy that may be an option for you. If you want more information please just email me at firstname.lastname@example.org
1) Settle or Negotiate your Debts
The most common type of bankruptcy filed is a Chapter 7, which eliminates your unsecured debts. Texas has really strong laws to protect a person filing bankruptcy from having to lose their possessions. However, even with the protections given to us by the state, there are some situations where a person could be forced to turnover their property. Most commonly I see this with people who have land besides their home. Often it is land that was inherited or land that was bought with plans for the future that never came through. This type of property may not be protected under the law and therefore it may be advantageous for you to consider debt settlement instead of bankruptcy.
Debt settlement is pretty straight forward if you have cash on hand. Often times the creditor will settle for cents on the dollar through an up front payment instead of risking getting nothing in a bankruptcy. If you do not have access to cash, you can still get payment plans to settle debt although you will have to repay a greater percentage of the overall debt.
2) Sell Property
You can sell your property to raise capital. Many people have antiques or collectibles that they don't really "need". Others have vacant lots or second cars. While you could most likely keep those items in a Chapter 7 bankruptcy, you may want to consider selling them. This will provide you with cash that you need to try and get a settlement. It can be hard to part with some of these possessions but it will provide you with an alternative to bankruptcy.
3) Borrow Money from Friends or Family
If you are considering filing bankruptcy then most likely your credit is not good enough to get a loan from a traditional bank. That leaves you to call on friends and family for support. If you are a person lucky enough to have people in your life who may be able to help, you can approach them for a loan. Make sure you do so in a professional manner. Have a budget prepared so you can demonstrate how you will be able to repay them. You may offer to include some interest on the their "investment" in you. Asking for money like this is a hard pill to swallow but it may help you avoid bankruptcy.
4) Restructure your Mortgage
If you can get your monthly mortgage reduced then you can use some of that extra money to pay towards your credit card debt. Sometimes the bank who has your loan will be willing to refinance the loan or you can go to a new bank to do the refinance. If you have enough equity in your home you could also pull cash out and use the cash to settle your credit card debt. I usually don't recommend this because you will be trading your unsecured debt for secured debt.
5) Budget, Budget, Budget
A lot can be accomplished with the money you already have coming in. Have you cut back on everything? Gym memberships, dinners out, dates with your significant others. These things can really add up . By cutting your budget back you will really have to decide what is most important to you and what you can live without. You can then use these savings to help pay down your debt.
Bankruptcy is a powerful tool to get a person who is in debt out of debt. Often times it is the best option. Sometimes it is not the best option. My role not just as an attorney but as a counselor, is to help you find the best option for you and your family. If you would like to schedule a free consultation you can call me at 817-494-3344 or go through my appointment scheduling program on the top right of each page.