Bankruptcy Alternatives

Bankruptcy is not the best choice for everyone, and you should be aware of all your alternatives before deciding to file for bankruptcy. There are several different options to consider, including home equity loans, debt consolidation loans (balance transfers), credit counseling & debt management plans, debt negotiation programs, reverse mortgages, and various self-help methods.

  • TN - Bankruptcy - Self-HelpCreditors’ internal policies can vary greatly, but many will agree to reduce interest rates or waive penalties upon a consumer’s direct request, particularly if the consumer has a good payment history or is viewed as a bankruptcy risk.
  • TN - Bankruptcy - Debt ConsolidationA balance transfer is a type of debt consolidation loan in which you transfer all or some of your debt onto a new credit card. The new creditor is lending you the money to pay off your existing debt, and usually is willing to offer a low introductory rate to get your business. They obviously are willing to do this for a reason.
  • TN - Bankruptcy - Reverse MortgagesA reverse mortgage allows you to receive money in exchange for the equity in your home without requiring you to make monthly payments. The loan will not have to be paid back until you (or any co-owner) no longer lives in the home.
  • TN - Bankruptcy - Credit CounselingCredit counseling agencies are mostly non-profit. Their primary purposes are to educate consumers about money management and to negotiate debt repayment. Counseling agencies can be a valuable resource in helping you prepare a budget to determine if you have enough income to service your debt, or if you ought to consider filing bankruptcy.
  • TN - Debt NegotiationDebt negotiation/debt settlement companies contact your creditors and attempt to negotiate a settlement of your debt for less than the full balance you owe. In recent years, this form of debt management has grown increasingly popular.
  • TN - Bankruptcy - Home Equity LoansA home equity loan can be one of the most useful bankruptcy alternatives due to its flexibility and tax-friendly consequences. However, it is also one of the riskiest because you must put up your house as collateral. That means that the lender places a lien on your real estate, meaning the lender can foreclose on your home if you fall behind on your monthly mortgage payments.

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