Unsure Whether Filing Chapter 7 Bankruptcy Is the Right Move For You?

Consider Your Alternatives to Filing Chapter 7 Bankruptcy

Everyone's financial situation is unique and there's no cookie-cutter answer to solve everybody's debt problems. There are many reasons why people fall into financial trouble and, as a result, there are different ways for people to attain freedom from debt.

If you're not sure whether Chapter 7 bankruptcy or Chapter 13 bankruptcy is the right move for you to make, there are other alternatives to bankruptcy. Chapter7.Me has listed some other Chapter 7 alternatives.

If you have further questions about any of the other alternatives to filing bankruptcy, don't hesitate in contacting a bankruptcy lawyer to seek legal advice. At Chapter7.Me, we can connect you with a local bankruptcy lawyer in no time – simply fill out our free bankruptcy evaluation form or call 1 (888) 632-0501, and we'll quickly get to work connecting you with a nearby bankruptcy attorney from our nationwide network of sponsoring bankruptcy lawyers.

The Payoff Alternative to Chapter 7 Bankruptcy: Pay Your Bills In Full, On Your Own

If you aren't facing a pending financial crisis, paying off your bills on your own may be a good alternative to filing Chapter 7 bankruptcy. We know it sounds easier than it actually can be, but if you're not too deep in debt, it can work.

Consider severely cutting back on your "extra" expenses. You'll have to get serious about saving if you choose this option. It also may be a good idea to take on another job.

Perhaps you could look after neighborhood children or paint houses to make extra income. Or, perhaps your boss would agree to give you some extra hours at your current job.

Another way to pick up extra cash is to sell any assets you don't really need. You could start repaying back your debt with the additional cash.

This alternative to bankruptcy may not be a good idea for people who are drained of funds. This option also doesn't give you protection like Chapter 7 bankruptcy, which offers you government protection from creditors.

The Negotiation Alternative to Filing Bankruptcy: Bargain With Your Creditors

This alternative to bankruptcy involves you contacting your creditors directly and asking them for a revised payment plan.

There's no law against what you can or can't ask them for—it just depends on how generous they are in delivering your requests. Feel free to ask for lower interest rates, partial debt forgiveness, additional time to pay your debt or any other negotiation you can think of.

The key to this debt-relief option is that the power lies in the hands of the creditors: they have the freedom to approve or deny your requests. It may be a time-consuming option if you're past due with many creditors.

The Loan Alternative to Filing Chapter 7 Bankruptcy: Take Out a Debt Consolidation Loan

If you like the idea of making just one payment a month to take care of all your debts, a debt consolidation loan might be a good alternative for you.

A debt consolidation loan comes from another lender and is usually for the total amount you owe on all of your loans. The lender secures the loan with your property (usually your home) and because the debt is now considered a secured debt, you may likely receive a lower interest rate.

This debt-relief option may not be a good idea if you don't think you'll be able to make payments on your consolidation loan.

If you miss payments, the lender has the right to seize your house (or whatever property you used as collateral). You could also end up paying more in the long run because of a high interest rate or a longer repayment period.

Could Chapter 7 be right for you? Begin our free attorney evaluation form

The Consultation Alternative to Bankruptcy: Work With A Credit Counseling Agency

Another alternative to filing bankruptcy could be that you decide to work with a credit counseling agency. The agency would negotiate with your creditors to create a new repayment schedule similar to the Chapter 13 bankruptcy repayment plan. Some may even be able to stop creditor calls.

But be careful, not all agencies are honest or exist just to help get you back on your feet.

Check out this government site for a list of reputable credit counseling agencies in your area.

Remember, a credit counseling agency may not be able to protect you from creditors if you miss a payment.

The Settlement Alternative to Chapter 7: Hire A Debt Settlement Agency

You may also consider debt settlement as an alternative to Chapter 7 bankruptcy. With debt settlement, a debt settlement agency acts as a middleman between you and your creditors, negotiating to reduce your debt by as much as 50 percent.

Just like the credit counseling option, not all debt settlement agencies are looking out for your best interest.

Remember, these companies are just that—companies that seek profits. Visit Chapter7.Me's section on Debt Settlement for tips on how to choose a debt settlement firm.

The Do-Nothing Alternative to Bankruptcy:Take No Action To Resolve Your Debt

Yes, doing nothing is actually an alternative to bankruptcy. Although doing nothing is NOT a practical solution for most people, in rare cases it may be a good alternative.

If you have very few assets and little income and plan on living that way indefinitely, you probably don't need to file Chapter 7 bankruptcy since you have nothing that creditors can legally take from you.

This is NOT a good option for people who have assets or a regular income. Serious consequences may occur if you choose to do nothing about your debt, such as liens on you car and house and serious harm to your credit score.

Determining Which Debt-Relief Option Is Right for You

You are the person that holds the key to unlocking your financial future. The choices you make now can affect you positively or negatively for years, so it's important to carefully consider all of your options.

If you would like legal advice to help you in making decisions, a bankruptcy attorney can be a good resource.

Connect to a local bankruptcy lawyer today by filling out Chapter7.Me's free, no obligation bankruptcy evaluation form or by calling 1 (888) 632-0501.

The above synopsis of bankruptcy laws is by no means all inclusive and is not intended to provide legal advice. These laws may have changed since our last update and there may additional laws that apply in your situation. For the latest information on these bankruptcy laws, please contact a bankruptcy lawyer in your area.