Bankruptcy can offer a fresh start, but it’s not right for all people. Consider the severity of your debt and your financial goals in the near future prior to filing. Alternative options often offer more manageable results and allow you to keep your credit in good standing.

Negotiating with creditors and reducing expenses are excellent strategies to avoid bankruptcy. This strategy should be done before filing and requires careful planning and budgeting. If you can cut your costs or negotiate lower interest rates, the money you save can be put towards paying down your debt.

You can reduce your debt by selling assets. This can help you pay your debts off and could even stop you from applying for Chapter 7 bankruptcy. Before selling your assets you should consult a bankruptcy lawyer to ensure that you qualify for this type of relief.

In bankruptcy the court will eliminate or “discharge” the majority of debt that is unsecured which includes credit card payment and medical bills, late utility bills, and personal loans. Certain debts, such as student loans, tax refunds in recent years payment, alimony, and child support, will not be affected by bankruptcy. One good way to prepare for bankruptcy is to focus on eliminating non-priority debt and then putting the money saved to pay for most expensive debts that will not be eliminated in bankruptcy.

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