Florida (OPENPRESS) August 11, 2011 - For many consumers, debt is simply a way of life. It can get so overwhelming, that bankruptcy seems like the only answer.
But because bankruptcy can have such a devastating effect on your credit score, it's better to seek other alternatives before you consider filing for Chapter 7 or Chapter 13 bankruptcy.
Many people facing an ever-growing amount of debt just want it to be gone quickly. But the best way to take care of that debt is going to take time and effort. If the alternative to bankruptcy will save your credit, it's certainly worth pursuing, even if it takes longer.
To avoid bankruptcy and help pay off debt, such as personal loans you may consider selling assets off, then use the money to pay down your debt. Make sure that you begin to do this the moment you can't afford your payments - if you wait until you're behind on your payments, it may be too late. Items to consider selling include jewelry, electronics or furniture.
Another step you can take to help pay down your debt is to cut down on your excess monthly expenses, and use that money toward your debt. You could turn off your cable or satellite television, change the service plan on your cell phone, turn off Internet service at home, and stop eating out for lunch or dinner; take your lunch to work instead.
If you've already done these things, it may be time to consider getting a part-time job or see if you can work some overtime hours at your current job. Find a way to get some extra income. You will be happy you did in the long term.
You should definitely talk with your creditors. Tell them about your situation, and ask if they will lower your monthly payment or decrease your interest rate. Many will do so to be sure they get at least some payment.
You should avoid debt settlement if at all possible, but when facing bankruptcy, this may be your only choice. But be sure you do it right. Don't use a debt settlement company - they cost too much and do too little. Instead, focus on debts that have been charged off or sent to collection. Be ready make payment as soon as you have agreed on an amount.
Whatever option you choose, make sure you learn your lesson. Never allow yourself to stack up painful debt again.