Best Alternatives to Bankruptcy: No need to sell your Assets

According to a report by Supreme Court Chief Justice John Roberts, corporate and consumer bankruptcy cases have hit their lowest point in the last decade. Filing for bankruptcy can be an appropriate action against some financial dilemmas corporation and regular citizens face, but it is not an end all be all solution. There are plenty of other alternative actions you can take to bail yourself out of a tough situation; without having to sell off your assets.

Here are the best alternatives to bankruptcy.

1. Debt Consolidation Loans

A debt consolidation loan is the best alternative to bankruptcy. Instead of declaring yourself bankrupt, you can apply for a consolidation loan which will allow merging all your debts into one single manageable loan. Your debt consolidation loan company will clear your outstanding payments so you don’t have to worry about your creditors anymore. However, you do have to pay decent interest on your debt consolidation loan but it is worth it.

2. Refinancing

Refinancing is another great alternative to bankruptcy. I understand that currently you are in massive debt and are desperately seeking a way out. But if your credit history is decent and you have a record of refinancing your house mortgage or car loans, you have a great chance of getting approved for refinancing.

The only problem with this alternative is, lenders don’t want to deal with someone who is on the verge of bankruptcy. So, consult a financial advisor to find out which lenders are more likely to refinance your loan.

3. Debt Management plans

Debt management can be performed either by hiring a debt management agent or all by yourself. A debt management company will negotiate with your creditors to reduce the interest rates and increase the repayment term. Which, in turn, will reduce your overall debt and prevent you from filing a bankruptcy.

4. Change your lifestyle. Live frugally

You don’t have to file a bankruptcy if you can dedicate all your resources towards paying off your debt. One way to do this is by adopting a new way of living. If you can put a stop to all the materialistic possessions you have, you can save enough money to pay off your debt. For instance, stop using your car, no more dining in fancy restaurants, begin riding a bike or walking to work, etc. Some people also call it a minimalistic lifestyle.

5. Work more to earn more

work more

If you are someone who has a debt of less than $10,000, working two jobs can be a good option. You don’t have to work 16 hours a day. Find a job that requires you to dedicate 10-15 hours per week. Needless to say, that job should also pay you well. Part-time occupations like teaching online, working for charity organizations, real estate consulting, house/pet sitting, delivering food, etc pay well and also don’t expect you to spend too much time on the job.


Once you file a bankruptcy, the records will stay for another 10 years on your credit scorecard. So think before you make a snap decision. Bankruptcy can also disrupt your personal life. You don’t want other people to sneak into your personal space. When you file bankruptcy,  the court will take a look at every financial transaction you made in the past.