Bankruptcy alternative is the method that you can use to save yourself from the long-term unpleasant consequences of being bankrupt. If you have reached a situation in your financial life where the debts you owe to various creditors, are much higher than your available sources of income, you might be planning about filing bankruptcy petition in the bankruptcy court.
However, before you fill out the bankruptcy form and hire your bankruptcy attorney, it is always prudent to look at the various available options as bankruptcy alternative. For example, debt consolidation can be a great financial tool and it may come at your rescue, when all doors are closed to you.
Is Bankruptcy Freedom From Debt?
Several people have a misconception that filing bankruptcy and getting oneself declared as bankrupt, is the easiest and safest way to get rid of the huge burden of debts. Well, when a person is caught into the nasty traps of debt, he or she has to face several unpleasant things, such as harassing calls from the collection agencies and various other financial pressures.
Therefore, it is not very strange, if he or she starts looking for bankruptcy as an easy alternative. However, here, let me make it very clear that sometimes, the solution looks an easy one, but in reality, it has serious outcomes. Bankruptcy falls into such category of financial solutions. Therefore, prudent people always explore their options and look into details thoroughly, whether any bankruptcy alternative is available to them.
What Is Debt Consolidation?
Debt consolidation can be a great bankruptcy alternative. It is a process in which you hire a particular financial agency to deal with your specific debt situation. Usually, the first thing that the debt consolidation agency does is that it assigns a credit counselor for your specific case. The credit counselor looks into the details and suggests you the specific debt consolidation plan accordingly.
Once you agree to go with a specific plan, the debt consolidation agency will consolidate all your debts into one single monthly installment. They will also talk to your creditors and persuade them to reduce the rate of interest. The greatest advantage of choosing debt consolidation as a bankruptcy alternative is that you will no more need to deal with your creditors directly.
Your debt consolidation agency will do that for you. You will pay the consolidated monthly installment to the debt consolidation agency and they will further remit the respective payment to the concerned creditors.
With the inclusion of the new bankruptcy laws, it is now mandatory for people filing bankruptcy, to go through a debt consolidation procedure. It is only if the debt consolidation, as a bankruptcy alternative does not work, you should go ahead and file for bankruptcy. Filing Bankruptcy is a free online resource providing information on different aspects of bankruptcy and tips to hire a competent bankruptcy lawyer.
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