Alternatives to Filing Bankruptcy
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Never spend your money before you have it.
Thomas Jefferson

Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.
Ogden Nash

Alternatives to Filing Bankruptcy

While it is true that filing a petition in Bankruptcy under the US Bankruptcy Code provides the most complete legal relief from debt, there may be less drastic alternatives.   Many people do not want the shock that bankruptcy provides to their credit history and the fact that the filing stays on their credit report for 10 years.  Here are are a few alternatives:
  1. Pay Down/ Pay Off the debt entirely:  This works only if you are willing to live on less and stop charging on the cards. Instead of paying only the minimum payment every month, commit to a plan whereby you pay the total minimum payments of all debts per month, until you have paid off all debts.  For instance, if you have 10 credit cards and you add up the total on all minimum payments, which is $1,500.00 per month. Then you commit to pay the total $1,500.00 per month. So as you pay off 1 credit card, you add the minimum payment to the payment on the next credit card, never decreasing the total payment amount of $1,500.00 until you pay off all the credit cards.  This plan accelerates the payoff and saves you a ton of money in interest.  To get started or just to get more information,  go to;   or
  2. Settle with the Creditor:  This works well if you have only a few creditors and some money to offer them.  You should use an attorney to assist you, especially if you have already been sued.  We have handled several cases like this successfully. 
  3. Ignore the bill collectors and change your telephone number.  The least enjoyable alternative.  This only works if you are “judgment proof,” i.e. you have nothing that the creditors can take from you and you don’t care about your credit history.  Generally, judgment-proof people are those:
    • with only Social Security or Retirement income
    • don’t own a home with equity
    • don't own a high value automobile
      - Some creditors can still take from you, like IRS, Student Loan Lenders, and the holder of a Domestic Support Obligation (child or spousal support).  Give us a call to discuss this if you believe that you fit into this category. 
  4. Sell off some property and use the proceeds to pay off debt:  Financed a car within the past year?  Take it back to the dealer and ask them to buy it back from you for the payoff balance of the loan.  If it is a high demand car in good condition, they will make you a good offer.  Sell some jewelry, electronics, or furniture on Craigslist or even in your front yard on weekends.  If something has been sitting around for a year or more and you haven’t used it, sell it!   You may not get what you paid for those items, but you weren’t using them anyway, so they were worthless to you.
  5. Stop buying stuff and save the $ instead:  Every time you think of buying something that you don’t need (and of course by now you aren’t charging the purchases) ask a spouse or buddy to talk you out of it and put the purchase price in the bank or on the credit card balances you owe.  When you have paid off the credit cards, start paying off the car, then the student loans, then your home mortgage.  Keep track of what you have been paying and put the same amount in a savings account every month and before you know it, you will have a nice little nest egg to go to when you have to spend for the unexpected.   This can be a very exciting, life changing process, so get started today.  Check out the websites above for plans if you need help.
- Click on Tools and then look into the "Get Debt Free" column on left
- Latest Debt Management Headlines has helpful information.  There are also calculators such as debt consolidation and true costs of paying minimums

George Price



317 Court Street NE
Suite 203
Salem, OR 97301

Phone (503) 363-7334
Fax (503) 581-2260