At some point in our lives, many of us will find ourselves in debt. We may be constantly harassed by creditors, unable to improve our credit score, and in danger of losing our remaining assets.

With looser federal restrictions on bankruptcy during the COVID-19 pandemic, more people are filing for bankruptcy than ever.

Bankruptcy can be a good solution for some people, but it can lead to new problems, like a 7- or 10-year mark on our credit report. It can also be a complicated and sometimes expensive legal process. 

Before filing for bankruptcy, you should consider all possible alternatives.

Negotiating with creditors

Creditors would rather get something from you than nothing. They may thus be willing to negotiate to reduce the amount you owe. You can talk to your creditors directly, or you can negotiate through a debt settlement company.

Assuming you’re willing to sell some of your assets or give away some of your income, this may be a great way to get creditors off your back.

Debt counseling

Before resorting to bankruptcy, you may want to seek help from a nonprofit debt counseling agency. They can sometimes help you find ways to restructure your finances and pay off debt without filing for bankruptcy.

You may also be able to restructure your finances yourself. Some simple changes to your lifestyle may help you save enough money to pay off your debts over time. Alternatively, you could find a way to earn some extra money or borrow  money from friends or family members.

Doing nothing

In some cases, the best option may be to do nothing at all. Except in special cases, such as refusing to pay taxes, you can’t be jailed for failing to pay debt.

Creditors also can’t take away the basic elements you need to live, such as housing, food, and clothing.

If creditors have been harassing you, check state and federal laws regarding debt collection, and read our site here about what is ‘fair’ for debt collectors to do. Certain kinds of harassment are illegal. By letting the creditors know that you understand your rights, you may be able to get them off your back. You can also choose to seek damages from them. Read our Bankruptcy Q&A to learn more, or call us today at 361-578-7200 to discuss your options. You may also text 361-648-6888 seven days a week. Let us help you make the right choice for you and your family.