avoid bankruptcy | How to avoid bankruptcy

Avoiding Bankruptcy

There are various reasons for getting into debt. Some are:

Credit card debt---some have the attitude that it isn’t really like cash you are spending and some forget to think before they purchase (they buy as fast as the thought enters their mind)
Many have lost jobs---the nation has sent so many jobs overseas, the minimum wage went up, more companies are being sued and they have to make up the money somehow so they let employees go. Also many companies let the employees that have been there the longest go because their salary is higher than someone new they can hire

Avoiding Bankruptcy

Health---Americans are not as healthy as they should be and fighting any kind of disease is harder. Obesity heads the list.
Divorce---one family households now have two households with each struggling to pay their bills, as well as possible alimony and support.

Stress alone is causing all types of problems ( depression, relationship problems, anger management problems etc). People are feeling like failures; ego’s are taking a beating. Your credit is a mess and you’re digging you self into financial ruin deeper every week.

So what can you do to avoid bankruptcy? First, realize that millions of people have been in your shoes and the only way to right all this mess is to speak up for yourself. Call each creditor and see what you can do to make arrangements to pay smaller amounts for a longer period of time. Offer to relinquish your credit cards. Some creditors (large corporations) can sometimes be terribly difficult to get through the paper-pushers to someone who can actually make a decision. Smaller businesses are worried if you don’t pay your bill, how are they going to pay theirs. Therefore they may deal with you feeling some money is better than none. If you find you aren’t getting anywhere, seek out credit counselors.

Try your best to avoid bankruptcy

Check with the IRS about the write-off of a bill becoming taxable income…form 982.

www.irs.ustreas.gov/formspubs/index.html

Consider selling as many assets as you can via ads in the paper, yard sales, pawn shops etc. and paying as much as you can on your bills. But it’s rare that people own enough items that can be sold to avoid bankruptcy….usually they have dug themselves in far too deep.

Remember if you tell your creditors you are going to file bankruptcy and that you are giving them a chance to settle in another way before doing so, avoid bankruptcy they may be more willing to work with you.

Also, if you file bankruptcy the fees can amount to money that could have gone to them for payment. Thus, they may find a way to make a deal with you and avoid bankruptcy

CCCS (Consumer Credit Counseling Services) is the most common and acts as an intermediary between you and creditors. It often gets late fees dropped and wage garnishments revoked. You work with them to devise a payment schedule you can live with and then you make the payments to CCCS, which forwards the money to the creditor. Creditors pay CCCS a commission on the funds that it collects. Fees charged the consumer is usually around $25. Call 800-388-2227 www.nfcc.org (they are a non-profit organization).

Of course, if you don’t really own anything, there is nothing the creditors can do but ruin your credit. You can’t go to jail for failure to pay debts (other than support obligations and criminal fines). They cannot strip you of clothing and food and would not take an old vehicle. The following are inaccessible and they cannot take them:

Social security benefits, unemployment and welfare. When a judgment creditor finds out where you bank (and they usually do, they can snatch your money. So if you have nothing and don’t plan on owning anything of real value, do not file bankruptcy.

avoid bankruptcy