risk management and small business
Bankruptcy can provide a fresh start, but it isn’t appropriate for everyone. Take into consideration the severity of your debt and your financial goals for the future prior to filing. Alternative solutions can often provide more manageable results and allow you to keep your credit intact.
Negotiating with creditors and cutting costs are great ways to avoid bankruptcy. This strategy should be done prior to filing and requires careful budgeting and planning. If you can cut your expenses or negotiate lower interest rates, the money you save can be used to pay down your debt.
Selling assets is a different way to lower your debt burden. This will let you pay your debts off and may even prevent you from filing for Chapter 7 bankruptcy. Before selling your assets you should consult with a bankruptcy lawyer to make sure that you qualify for this type relief.
In bankruptcy the court will eliminate or “discharge” the majority of unsecured debt which includes credit card payment, medical bills, overdue utility bills, and personal loans. Certain debts, such as student loans, tax refunds in recent years or alimony payments, as well as child support, will not be affected by bankruptcy. A good strategy before filing for bankruptcy is to concentrate on erasing non-priority unsecured debt and then use any money saved towards the more costly debts that cannot be eliminated with bankruptcy.