Getting debt relief without bankruptcy is easier than you think with this process
Bankruptcy seems like an easy solution but it's far from it. You may be able to wipe out a few thousand in debt but you'll be left with a ruined credit score and a lot of other issues for up to ten years.
Those bankruptcy problems range from super high interest rates that cost thousands of dollars to not being able to get a job because of a credit check.
There is a better solution, debt relief without bankruptcy.
Sure, yeah sounds easy. IF I could get out of debt without bankruptcy wouldn’t you think I would have done it?
Ok, so debt relief without filing bankruptcy is easier said than done but it isn’t as tough as you may think.
In fact, I’ve got a step-by-step process for ditching debt without filing Chapter 7 bankruptcy.
How Much Debt Do You Have?
When the bills start piling up, it’s easy to lose track of how much you owe. Even worse, it’s too easy to miss a payment when you are paying different bills every week. One survey shows that up to 20% of missed payments are simply because the borrower forgot to make the payment.
Boom – credit score ruined and all your interest rates go up.
Figuring a way out of debt without bankruptcy means getting organized and managing everything at once. That’s how bankruptcy works, right? So why shouldn’t your debt relief without bankruptcy work all at once also.
So put together all the most recent bills and statements. Then list all the amounts owned and interest rates on a sheet of paper.
Why Do You Have Debt Problems?
This is really the hardest step in the debt relief process whether it’s with a bankruptcy or without filing. You have to be honest with yourself about why you have so much debt.
- Do you make enough money but don’t save anything and eventually an emergency comes along where you need to borrow to pay it?
- Do you just not make enough money, no matter how low you get your budget?
- Do you just spend too damn much on stuff you don’t need?
I’m not judging. Shopping is fun. Even the grocery store is an expert at sucking the money out of our pockets.
- If you aren’t making enough money, check out these work from home jobs you can start with just a few hours a week to make extra cash.
- Need to find places to cut your budget but not sure how? Check out these 20 tips to save up to $7,500 a year.
- If you just can’t seem to save any money, learn how to turn your budget upside down and these other budget tricks to help save money.
You can get out of debt without bankruptcy but if you don’t solve your debt problems then you’ll just be back in the same place.
Debt Relief Resources without Bankruptcy
Once you’ve got all your debt lined up and have figured out your debt problems, it’s time to handle it…without bankruptcy.
When I say debt relief without bankruptcy, I don’t mean debt negotiation services that offer to lower your debt by talking to creditors. That can be just as bad as bankruptcy because they tell you to stop paying your bills while they negotiate. You might get a few thousand wiped off but you’ve also destroyed your credit and end up paying almost all your savings to the debt services company.
There are a few legit resources to pay off your debt without bankruptcy. They may not be as easy as just walking away from it but you’ll save a ton of money in interest and won’t ruin your credit score.
- Debt consolidation loans – This is the most popular solution for a couple of reasons. You take out one loan up to $35,000 to pay off all your bills and then make just one payment a month. You save money on the interest rate and avoid missing payments. Plus, it helps to improve your credit score so interest rates go down on any new loans.
- Sell some stuff – Yeah, we all have ‘stuff’ sitting around the house that seemed like a good idea when you bought it. Even if you only get half of what you paid, it’s still better than using it as a coat rack.
- Side Hustle – This works into the work from home jobs idea above. There are a lot of things you can do just a few hours a week to start making extra cash.
- Investments – Selling your investments is rarely a good option but you’ll probably lose them in a bankruptcy anyway. If you’re paying 20% interest on debt and only making 6% return on stocks…doesn’t it just make sense?
Apply for a debt consolidation loan – Click to check your rate without affecting your credit
How to stay out of debt
You might not be able to pay off all your debt with the resources above but you can put enough cash together to avoid bankruptcy. Believe me, I’ve seen what it does to people’s financial lives and avoiding bankruptcy is a huge win.
If it comes down to paying off some of your debt but not all, learn how to rank your debt so you pay it off as fast as possible. There are a couple of different strategies including the Avalanche and the Snowball Method so it’s important to know which is best for you. It’s not as simple as just paying off the high-interest debt first.
If you are able to get debt relief without bankruptcy, congratulate yourself with a reward. I’m not talking about splurging on a huge vacation but treat yourself to a dinner out or something reasonable. The worst thing you can do is skimp every penny and burn out on your financial plan.