With the recent recession in the economy, the number of people pushed to the point of filing bankruptcy has increased.
But we all know filing for bankruptcy affects the consumer badly.
But what problem does filing for bankruptcy solve? Obviously, the consumer cannot pay his debt and the credit card companies cannot get back any of their money from that point onwards.
This is a no win situation.
Now let us try this new scenario.
What if the unsecured debt amount is reduced by 50%.
Then the money outflow gets reduced and so does the chance of filing for bankruptcy.
Let's say your credit card debt is for fifty thousand dollars.
If that can be negotiated and brought down to twenty five thousand dollar, the monthly repayment will be reduced by half and you will get additional twelve to twenty four months to repay the balance amount.
Then filing for bankruptcy can be completely avoided.
This is more easily said than done.
You will need careful planning and good financial and legal advice to actually make this happen.
Firstly, you will need to find out all the potential sources of income you have, like some savings that you might have or shares and likewise.
Then you need to list out all the points from where the outflow of money is or can take place like your monthly expenditure or some foreseen medical expenditure like pregnancy and so on.
You will need to collect all information starting from exactly what is the amount that you can spare every month to your current debt status.
Then you might be able to go ahead to the negotiation table.
Here all your analysis and research about your current financial condition will help you strike a deal which will make your life easier.
What has to be kept in mind is that once this deal is made renegotiation will be next to impossible.
Hence it is advisable to have a financial advisor by your side when you strike this deal.