Bankruptcy is one of the biggest financial disasters that you can step into. It is true that it will eliminate hundred percent of the dues that you have. However, the moment you win the case bankruptcy is filed, the credit score that you have earned over years will dip down to zero and this is where the problems start. With the credit score moving down to zero, the creditors will decline any request of fresh loans from you. Since the report of bankruptcy filing continues to show up on your credit history for seven to ten years, you will have to suffer this state for that time frame. Later, when that period is over, you will get fresh loans but the creditors will charge higher interest rates. It is because of these reasons that consumers are asked to avoid the the filing of bankruptcy.

But, how will you avoid bankruptcy? Here are some of the bankruptcy tips that can help you to avoid bankruptcy and the troubles associated with the same. Some of the methods that can be used to avoid bankruptcy are mentioned below:

• You can opt for debt settlement as the first alternative. More clearly, this method is the best that can be applied to eliminate unsecured loans. The method will ensure that at least 50% of the dues are eliminated and that the credit score remains intact. A professional negotiator deals with the creditor and negotiates on your behalf and using the threat of bankruptcy, forces the creditor for elimination of at least 50% of the dues. This method can take a maximum of 3 years to complete.

• As a consumer, you can also opt for debt consolidation. A consolidator will contact the creditors and ask for reduction in the interest rates and also ask to eliminate some of the costs of the loan. These costs generally include service fee, late fee and others. No reduction in the principal debt is requested for. The creditors are forced to agree by using the threat of bankruptcy. Once the creditors agree, they re-amortize the repayment schedule and then, you will have to repay accordingly to the new schedule.

• The final thing that you can do is to make a new budget and eliminate all the unnecessary expenses to save more money. Use this money for the repayment of the debts starting with the one that has the highest rate of interest and then following the others. This will avoid the galloping growth of the total outstanding due to high interest rates.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement.

Author: Sankalan Baidya


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Learn a Few Tips on How to Avoid Bankruptcy4.5Richard Murphy2011-01-28 08:12:27Bankruptcy is one of the biggest financial disasters that you can step into. It is true that it will eliminate hundred percent of the dues that you ha…
Learn a Few Tips on How to Avoid BankruptcyBankruptcy is one of the biggest financial disasters that you can step into. It is true that it will eliminate hundred percent of the dues that you ha…