Bankruptcy can be an effective tool if you are overwhelmed by debt. However, you have to qualify. In other words, your petition for bankruptcy could be refused if you do not meet certain criteria.
If you cannot discharge your debt via personal bankruptcy, you need to consider other debt-relief options. These alternatives are varied depending on the circumstances of your case. Here are two debt relief options worth considering if you cannot petition for bankruptcy:
Debt consolidation
If you have multiple debts to get rid of, then you may consider combining them under a new personal loan or credit card to streamline the repayment process. This is more of a debt management plan.
Consolidating your debts can come with a number of benefits such as a lower repayment rate on your new debt. It also makes the repayment process much easier. In other words, debt consolidation can save you from the hassle of juggling multiple payments as they come due at different times of the month.
Debt settlement
Like debt consolidation, debt resettlement happens when you work with a third-party settlement agency to take over your unpaid debts. However, this is riskier and more expensive compared to debt consolidation. And while it takes the work out as far as negotiating with and paying your creditors is concerned, it is important to understand that debt settlement does not oblige the creditors to work with your chosen settlement agency. Additionally, since you will cease paying your creditors directly and, instead, work with the settlement agency, you can expect your credit score to be impacted.
Debt can give you sleepless nights and hurt your productivity. It doesn’t get any better if bankruptcy is not an option. Fortunately, there are other debt-relief options at your disposal.
