You do realize that your financial situation is getting out of control and might land you at the doorstep of the bankruptcy court. If you start working on your finances NOW, you may be able to avoid a bankruptcy filing. Depending on what sort of financial mess you are trying to come out of, there are a few alternatives to filing bankruptcy.
• Managing your finances with an outsider’s help: This might be difficult to start with because it involves handing over a lot of control over your finances to some one else. But it is significant that you choose the right person. The person who will be your financial manager will only give you an allowance for your personal expenses until your financial situation is under control. It is most likely that your financial situation has ended up in a mess because of thoughtless spending. This alternative will be helpful if you have bad spending habits. However, make sure that the financial manager does not charge you high fees or that itself will be another liability to deal with. There are certain non profit organizations offering financial management services and it might be a good idea to choose one of them.
• Negotiate with your creditors: You never know, but you could try talking to your creditors and request them to waive a part of what is owed, like late payment fees that have accumulated over time. Creditors generally agree to relax rules if you assure to make payment on the debt. Intelligent creditors know that it may be practically impossible to collect from you in case you file bankruptcy.
• Consider refinancing: You might have some equity in the home you own. Consider refinancing the home and utilize the amount to pay off all your debts. Give preference to paying off the high interest debts. Refinancing can be secured at lower interest rates for longer terms thereby bringing down your monthly liability considerably.
All these alternatives should be exercised with care and caution and after analyzing your personal financial situation. Always remember that what method suits someone else need not necessarily be suitable for you.