Alternatives to Bankruptcy

1) Contact your creditors and ask for their cooperation. Try to work out payment arrangements. If you are buried in credit card debt, explain the situation, and ask the lender to temporarily reduce your minimum monthly payment or waive late charges and extend the payment.

2) Consumer Credit Counseling Service, or CCCS is a nonprofit debt counseling service that assists consumers who are over their heads in debt. CCCS is funded and controlled by the credit grantors and credit bureaus. Often, CCCS provides a beneficial service to the consumer. Because of the obvious allegiance between CCCS and the credit bureaus, you cannot reasonably expect CCCS to do anything that the credit bureaus would frown upon, such as helping you restore your credit. In fact, if you decide to leave CCCS before you have finished their program, they can note your failure to complete the process as a negative listing on your credit report. When you participate in the CCCS program, your creditors will sometimes (though rarely) note it on your credit report. The fact that you resorted to a debt counseling program is a huge red flag for prospective credit grantors. Remember, paying off your debt is a step in the right direction, but it does not restore your credit.

3) Consider selling assets that have a resale value and applying the proceeds to your debt. Sometimes creditors are willing to negotiate balances due.

4) Consolidate outstanding debts into a single loan--possibly through credit card balance transfers and home equity loans.

5) Ask friends and/or relatives to assist you by way of a loan. It's advisable to make it as businesslike as possible by drawing up a contract.

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