5 Tips for Sidestepping Bankruptcy and Moving Towards a Brighter Financial Future

For those debtors who've (unexpectedly) stumbled into financial quicksand, watching the debt-ridden version of yourself sink deeper into debt can feel like a slow-motion reel of nightmares realized. After tirelessly trying to stay afloat (and up-to-date on payments), restoring your financial health can pose a seemingly impossible challenge.

By now, you might be wondering if bankruptcy is your only option for relief. If you've toyed with the idea of declaring bankruptcy, lingering fears may prevent you from biting the bullet and pulling the trigger on a brighter financial future. For those consumed by bankruptcy-related anxieties, fears of never qualifying for a mortgage or car loan again may warp these debtors' perceptions of bankruptcy. In other cases, individuals may rightfully fear losing assets, while other debt-ridden families can't bear the thought of neighborhood gossip and disapproving glances when their bankruptcy becomes public record.

For those on the fast track to financial devastation, you may be wondering: “How did I get here?” It's important to note that the road to bankruptcy is often paved with good intentions and last-minute problem-solving strategies. Whether you're coping with unforeseen medical expenses, business losses, divorce, or job loss, or you're swarmed by unmanageable debt, playing the blame game and stewing in guilt is far from productive.

While you may feel bankruptcy is your only option, you might want to reconsider based on the possible consequences. The direct repercussions would include direct damage to your credit score for up to ten years, difficulty securing employment, and unexpected twists when renting an apartment.

Despite your best efforts, steering clear of bankruptcy might be difficult if your financial situation has reached a point of no return. If that is the case, you'll need to walk the personal finance plank and dive headfirst into the bankruptcy process. Before you do that, you need to hire a bankruptcy attorney like this.

While attorney fees may plunge you deeper into debt, this legal representation could be worth the incurred cost, as experts will lend a helping hand and walk you through the process of declaring bankruptcy from start to finish. Not to mention, bankruptcy-specific attorneys will offer representation in the courtroom.

As you contemplate going through bankruptcy, here are five suggestions on how you might be able to sidestep these financial woes.

Consider debt consolidation

If your credit score is at least average, you may qualify for debt consolidation. With debt consolidation, you might be able to roll all of your unsecured debt into one loan, which will feature a lower payment and effective interest rate and grant the debtor more time to repay these long-standing debts.

Sell off assets

Selling assets is a difficult decision to make. However, the potential to dodge bankruptcy may make the vacation home sale and empty jewelry box worthwhile.

Take on a second job

For a short period, you might be able to earn your way out of debt with a side hustle. While it may not lower your stress, balancing back-to-back shifts is often the lesser of two evils. Should you decide to venture down this route, remember, these 80-hour works aren't permanent.

Seek help from family and friends

Without making more mistakes related to your debt, it might be possible for a family member or friend to help you out, not bail you out. If you approach someone, do so with a plan to repay them. Additionally, you'll want to present your debt-fighting strategies.

Debt Settlement

If declaring bankruptcy feels unthinkable, consider debt settlement. Through an advocate, you could ask creditors to settle for less in exchange for a new payment plan that you should be able to manage.

Wrap up

Don't let your pride prevent you from striving towards a brighter financial future. Act in the best interest of your loved ones, and remember that sometimes the only way out is through.