There are several types of bankruptcy alternative available for a consumer. With
the new bankruptcy laws of 2005, anyone petitioning for insolvency must first
attend debt counseling
and must meet the requirements of a "means test." During the debt consultation,
the counselor develops alternatives and repayment strategies to avoid
unnecessary filings. They also typically propose simple budgeting and
organizational methods to help consumers with their debts. The
Debt Consolidation Loan
Directory offers several smaller sub-directories with debt help options that can
serve as alternatives to bankruptcy:
- Debt Consolidation Programs - Too many credit card debts and other bills to make monthly payments on? Review this directory for useful personal finance information and to compare a list of debt consolidation providers of loans and other related debt help services.
- Credit Counseling Companies - Looking for help from an experienced credit counselor? The ODP (Open Directory Project) offers a list of non-profit credit counseling companies that can help you tackle the problem of mounting debts.
- Debt Settlement firms - If you have a large amount credit cards and other unsecured debts, and have fallen behind your payments, this form of debt negotiation may be the right option for helping you with your financial problems.
- Consolidate Bills - Unsecured bills piling up with payment and over the limit fees on your credit cards? View a list of companies offering different bill consolidation options to individuals.
More Bankruptcy Alternative Information:
Other alternatives to bankruptcy are debt consolidation
programs. Debt consolidation usually results in the combination of all outstanding debts into
one loan or monthly payment. Home equity loans
mortgage refinancing are common types of loans used for debt consolidation.
Other services offer to lower interest rates and to pay creditors on behalf of
the consumers. The consumer makes one monthly payment and saves money on
interest charges as well. All of these options are designer to help consumers with financial hardships who might
otherwise file for bankruptcy.
Debt settlement is also another beneficial alternative to consumers facing bankruptcy and can usually help avoid insolvency. This method of debt relief focuses on negotiating a reduced total balance for the consumer to repay. Savings can vary, according to a creditor's willingness to settle the debts that are owed. Debt settlement programs normally seek to eliminate a consumer's debt within three years, which can save consumers thousands of dollars in debts and interest charges and save them the pain of having a bankruptcy on their credit report for 7 to 10 years.