People apply for bankruptcy when they cannot pay their debts. Bankruptcy is a legal process that helps the debtor to repay debt that cannot be repaid. The most important thing in bankruptcy is that the money that cannot be demanded is forgiven. It seems that applying for bankruptcy is a good choice for a company or individual consumer. As we know, GM filed for bankruptcy protection on June 1.
Personal bankruptcy has a negative impact on personal credit records. You should be cautious about applying for bankruptcy protection. On the other hand, bankruptcy also hinders people's ability to find loans. In addition, bankruptcy may affect an investment retirement account.
This is why we should avoid bankruptcy. Here are some options for avoiding bankruptcy.
Borrowing money from a friend or relative
To avoid bankruptcy, you can borrow money from friends or relatives to pay off debt or solve financial problems. If you value your credit, this is a better way to borrow than to declare bankruptcy. There are tips on how to borrow money from friends, classmates, alumni and relatives on the Internet.
Debt relief program
Credit counseling companies are willing to negotiate with creditors. If possible, creditors want to reduce up to 50% of their debt. However, there are conditions in this case: the debtor must meet the minimum payment for the loan.
Consolidated Debt
Debt consolidation should be considered before declaring bankruptcy. In this case, the debt consolidation agency provides the debtor with a single loan to cover all other debts. This is good for the debtor because the loan rate provided by the debt consolidation agency is lower than the interest rate for multiple loans. The debtor should repay the single debt to the debt consolidation agency in the future.
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Orignal From: Ways to avoid personal bankruptcy
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