Alternatives to Filing for Bankruptcy.
If you live in Des Moines, Ames or anywhere in Iowa and are thinking of filing for personal bankruptcy, here are some alternatives to consider:
Consumer Credit Counseling:
If you have the ability to pay your debt, you may want to enroll in a consumer credit counseling program. Beware; many distant online consumer credit organizations are unreliable. The IRS and FTC are investigating many of these non profit companies who actually operate to benefit insiders and not clients. They may take your money and not actually give it to your creditors, resulting in higher debt, garnishment and/or repossession for you. If you feel that you can pay off your debt, we recommend you contact Tom Coates at Consumer Credit of Des Moines or call Tom at 515-287-6428. Tom is the gentleman on the television ads in Des Moines and his organization is well respected and legitimate. Many of our clients go to see consumer credit and then decide they simply cannot handle the payments to consumer credit and decide to file bankruptcy anyway. If you are on the fence about this we suggest you go see consumer credit and see what they can do. If nothing else, you will probably feel better about your decision to file bankruptcy if you have carefully examined alternatives.
Paying the debt off yourself:
If you have the ability to pay off your debt yourself, you may want to pour as much money as possible into the debt with the highest interest rate. After that, you would focus on the next highest interest rate debt and so on. You may be able to pay off the debt quicker this way and have some sense of accomplishment as you pay off each debt.
Many people take out a second home mortgage to pay off credit card or other debt. In doing so, they convert dischargeable unsecured debt to non-dischargeable secured debt. The banking industry understands this, and that is why they aggressively market second mortgages to people with unmanageable debt. The homeowner, then faced with the prospect of paying back very high debt or losing their home, may continue paying the debt in a form of indentured servitude even if the loan is much higher than the homes value. If keeping the home is a priority, consumer bankruptcy may make the house payment more affordable over the long term.
This is the one approach that everyone agrees is irresponsible. By doing nothing, most people continue to acquire debt they know they will never be able to repay. Some people continue making minimum credit card payments, watching the card balances actually increase each month, living in sort of indentured servitude. But worst, by not doing anything, you make it impossible to start financial recovery. You would be unable to start saving for important purchases like home, college expenses and retirement. Your wages could be garnished, your home or car repossessed and you could actually end up on welfare. Nobody wants this to happen. Congress thought this through carefully and passed the bankruptcy law to help you escape this downward spiral and start fresh.