A number of alternatives to bankruptcy exist for individuals who are facing financial difficulty. Listed below are various options which may be of assistance.
Contact Your Creditors
Explain to your creditors how your circumstances have changed and explain why you cannot make your agreed upon payments. Suggest an arrangement that could work for both of you. Creditors are generally prepared to work with you.
Debt Consolidation Loan
You can approach a bank or financial institution about combining or “consolidating” your debts into one loan. The financial institution pays off all your debts and you only make a monthly payment to that creditor. Quite often, the financial institution will ask for a co-signor.
In some cases we can work with you and your creditors to set up a payment plan that will allow you to pay your creditors in an orderly way and thus help preserve your credit rating. This operates similar to a debt consolidation loan except you do not borrow the money to pay off your creditors.
There are a number of debt counsellors who will make arrangements with your creditors to pay off your indebtness in full. The counsellor will review your financial situation and arrange for a payment program to be made between you and your creditors. A fee may be charged by the counsellor in order to perform this service.