Bankruptcy is a legal process that relieves you off your debt for some time, but in the long run, declaring bankruptcy can have a very serious effect on your credit report and remains for almost 7-10 years on your report affecting your ability to get loans in the future. So, I am going to present you with four alternatives that can save you from bankruptcy. Going for one or all of these options is definitely better than going bankrupt.

1. Enter an IVA Program

An IVA is an individual voluntary agreement that is a legal binding contract between you and those you owe money. After you have signed an IVA, you get a period of time, usually 5 years, during which you can pay off the debt you owe. It prevents all the creditors from taking any action against you. The best thing about an IVA is that you get to keep your home and personal items. Over the past few years, IVA’s have become a lot more popular. If you want IVA help and information, head over the link and learn more about it.

2. Sell Some Assets

Paying off debt should be your foremost priority. Sell whatever you have in excess and whatever you can live without. If you notice that you can’t keep up with your payments, immediately take action. Many people think that they can’t live without luxurious things, but in the long run, you will understand that it is only temporary and things will get better.


3. Talk With Your Credits

Now I know this sounds crazy, but hear me out. Most creditors would rather get some money from you than getting none at all. Bankruptcy affects your creditors as much as it affects you. If you talk with your creditors before filing for bankruptcy and let them know that you are having financial difficulties they might listen. Most creditors have special hardship programs to assists you in your time of need. Ask them if they can lower the amount of monthly payments or lower your interest rate. Believe it or not, you can sweet talk you way out of bankruptcy.

4. Get Help from Friend and Friendly

Borrowing money from friends and family is a very bad idea, and it should be your last resort. Money has the power to create misunderstanding between lifelong friends, so you should be very careful. Calculate how much money you need and how much money can you pay off on your own. Never take more than what you need and pay up as soon as you can. Most importantly, before asking them for money, you should have a clear plan on how you are going to pay them back. Your family and friends will happily help you but don’t take advantage of their kindness and earn their trust for the future by paying them what you owe without them asking for it.