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Ways to Avoid Bankruptcy Part II

10-Sep-2012

Debt Settlement: This is a legitimate option, especially when you cannot keep up with the minimum payments on your debts. A debt settlement (or debt reduction) program is where your creditors cut down your debt amount by 40-60% of what you owe.

What you need to do is, negotiate with creditors or collection agencies in order to reduce your debt amount. You can get help from professional settlement services. Check out how to get help settling your debts. You can also settle debts on your own. Check out how to how to settle your debts yourself and avoid bankruptcy as a way to get out of debt.

Debt Consolidation Program: If you wish to avoid bankruptcy and make monthly bill payments at reduced interest rates, then debt consolidation (or bill consolidation) program may be your right choice.

.A debt consolidation program is where you consolidate your bills into one easy monthly payment by taking out a lower interest loan to pay off your debts. It makes sense to choose debt consolidation in order to avoid bankruptcy when you still have good credit and a dependable income.

Debt Management: This is where a credit counseling agency or a debt management firm helps you reduce your interest rates and penalties. You then make your monthly payments to the credit counseling company and comfortably manage your bills to get debt free in a predictable and faster time frame.

Payday Loan Consolidation: If you're struggling with payday loans and wish to avoid bankruptcy, then payday loan consolidation is what you may choose. This is where you consolidate and replace multiple payday loans into an affordable monthly payment.

What you need to do is, find a local finance company, they can often offer a much better loan product where you can consolidate or convert your payday loan(s) in to a single personal loan. The rates and terms are usually more reasonable and you can establish a positive credit line with timely repayment.

Do It Yourself Plan: The Do it yourself (DIY) plan is where you try getting out of debt on your own without going for professional debt help services. To make your DIY plan effective, you will need to negotiate with your creditors and come up with a monthly payment you can afford to pay. You'll have to plan a budget to manage your daily expenses in addition to paying off your debts. This option provides you flexibilities missing from a chapter 13 bankruptcy repayment plan.




Remember This: If you're having trouble paying your bills, the best thing is to develop a plan of action ASAP. A good plan may help you avoid bankruptcy and even protect your credit in times of financial crisis. What's important is to analyze your financial situation and find an appropriate solution to your debt problems.

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