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How Individuals and Companies Can Avoid Bankruptcy

How Individuals and Companies Can Avoid Bankruptcy
"In 2009 alone, 67,265 Michigan consumers filed for bankruptcy protection. While Chapter 7 bankruptcy provides a clean slate and Chapter 13 bankruptcy allows you to repay your obligations, every bankruptcy has a negative impact on your credit score and future ability to obtain credit.

reducing household debt

Alternatives to bankruptcy may be a superior option and ultimately restore credit more quickly than bankruptcy. Consider the subsequent -

Selling Assets - If it is becoming increasingly difficult to pay your expenses, you should consider selling some of your assets. Even if you only have enough money to pay off one or two obligations, your financial situation will be improved. Many of us have valuable items that we no longer need or use and can sell them on eBay, Craigslist, at yard sales, or at estate sales.
By eliminating unnecessary expenses from your budget, you can increase your disposable income and apply the additional funds to your obligations. Consider reducing or eliminating non-essential expenditures such as paid cable services, dining out, expensive mobile phone contracts, and magazine subscriptions.
Discuss with your creditors - Creditors are becoming more receptive to new payment plans, reduced interest rates, and debt settlements as a result of the increasing number of individuals experiencing financial hardship. There are even credit card companies that offer hardship programs. Nonetheless, prior to consenting to a hardship program, ensure that your monthly payment and interest rate will decrease.

Methods for companies to reduce debt

These measures may be helpful for businesses attempting to avoid bankruptcy:

Employ a financial planner to develop a strategy for negotiating with and paying off your creditors.
Issue additional shares to assist in capital formation. However, a stock split dilutes the value of the shares and requires majority shareholder approval.
Offer to exchange a portion of your debt for equity in your business.
Change your equipment, health care, and benefit providers in order to reduce your operating expenses.
Sell assets and equipment that are unused for cash.
Employ layoffs and additional cost reductions.

Obtaining legal counsel if you must apply for bankruptcy

Contact a qualified bankruptcy attorney if you find that bankruptcy is still your best option after completing the steps listed above. In a bankruptcy matter, he or she can advise you on the best way to file and how to protect your assets.

" - https://www.affordablecebu.com/
 

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"How Individuals and Companies Can Avoid Bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 160 times and generated 0 comments. The article was created on and updated on 03 June 2023.
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