Bankruptcy happens when a person or a business is unable to repay their existing debts, which is a very reasonable option for those in debt. The process starts once the debtor or creditor filed a petition. However, a bankruptcy will damage your credit like nothing else and it remains on your record 5 or more years, which means it is still affecting your credit five years from now when you want to purchase a new house.

Fortunately, there are many ways to help ypu stay away from bankruptcy.

1. You can choose to work with a consumer credit counselor. This is a way to lump all your bills into one payment, then you send each month, and the debt counselor sends out the payments to your creditors. This is can take you two or three years to pay off everything, but in the end, you still avoided bankruptcy.

2. If you have a relative that you can borrow money from in order to avoid bankruptcy, this might be a good option for you. While many people frown on this, when it comes to borrowing from family or bankruptcy, borrowing is clearly the way to go. Make sure you work out an agreement on how you will pay the money back, this avoids hard feelings in the future and helps you to stick to what you promised as far as paying back the borrowed money.

3. If you have some assets such as jewelry or electronics, you can sell these to get some instant money in to help pay your creditors. Even if you have to live without your current excesses, it is still better than bankruptcy and when you have everything caught up, you can always purchase items in the future.

4. Debt settlement is one of those things that must be avoided under any normal circumstances. Anyone who’s in the brink of bankruptcy is not normal. If you need to choose between settling a number of debts and filing bankruptcy, you must go with settling the debts but never rely on Debt Settlement Company. Too much time and extra money are wasted if you choose to deal with these companies. You also don’t settle any current debt instead focus your attention to those that have been charged off or sent to collection.

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