Alternative Bankruptcy Solutions
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Bankruptcy can offer a fresh start, but it isn’t right for all people. Consider the severity of your debt and your financial goals in the future before you file. Alternative solutions often produce more manageable outcomes and keep your credit intact.
The reduction of expenses and negotiation with creditors is a good way to avoid bankruptcy. This strategy should be done prior to filing and requires careful budgeting and financial planning. If you are able to cut your expenses or negotiate a less interest rate the savings can be used to pay off your debt.
You can lower your debt by selling assets. This will help you to pay off your debts and may help you avoid having to apply for Chapter 7 bankruptcy. The most efficient way to proceed before selling your assets is to talk with a bankruptcy lawyer to ensure you’ll qualify for this type of relief.
In bankruptcy, the court will “discharge” or “erase” most unsecured debts such as credit card bills medical bills, late utility bills and personal loan. Certain debts, such as student loans, recent tax or alimony payments, as well as child support, will survive bankruptcy. A good strategy before filing for bankruptcy is to concentrate on eliminating unsecured debt that is not priority and then putting any savings to pay off more expensive debts that can’t be eliminated by bankruptcy.