Getting out of debt can be difficult if you have a large amount to pay or lack money management skills necessary. It could be due to overspending or circumstances beyond your control that caused you to fall into debt. Perhaps you lost your job, or you are facing long-term disability.

If you have a large amount of debt, then filing for bankruptcy may seem like the best route. While bankruptcy may help you get out of most debt, there are long-term consequences you can face in the future. One definite consequence is the bankruptcy will stay on your credit report for several years, which will reduce your ability to access credit.

This is why it is best to avoid filing for bankruptcy and trying other alternatives first. Here are some generally recommended methods to avoid the hassle of filing for bankruptcy.

New Budget

The first and far most effective step to take when trying to avoid bankruptcy. Strictly limit any frivolous spending habits. Although it can be hard to cut down so drastically, this strategy can help with reducing potential debt considerably.

Consider how much you spend each month, review your budget, and craft a new one. Find areas where you can minimize spending to reduce costs wherever possible. Spending less also allows you to concentrate more on paying down your debts.


Creditors are actually willing to work with you if you can communicate with them proactively to let them know that you are determined to pay your debts. Be open about your financial difficulties, and let them know that you want to avoid bankruptcy. Show your willingness to pay off debts, and ask if they would consider lowering the interest rate or your monthly payment, or even both.  Most banks and credit card companies have payment assistance programs to help clients in this type of situation.


One major reason why people end up filing for bankruptcy is the large total of unpaid debt. So, debt repayments should be your top priority. Make a list of all unpaid bills and the total of how much you owe. Next, prioritize those that are most important and urgent, and pay them first. It is also best to first clear those with high interest rates, since they cost more money over time.

Revenue Streams

Another great way to clear debts faster is by increasing your income. This may mean taking a second job, shifting to a higher paying job, or working extra hours. You can also sell some of the stuff that is less useful to you.

If you qualify, make use of government help for medical care, mortgage forbearance, food assistance, and other aid, especially if your income resource is running low. This can keep you out of bankruptcy and help you get back on your feet.

Professional Help

These strategies can allow you to gain control of your debt, pay it off, and avoid bankruptcy. If however, you decide to file bankruptcy, you should first learn how it works exactly. Bankruptcy is a legal matter and a complex process. So, the safest route for you is to have an attorney’s guidance. You can count on Foley Law Offices, and we are glad to help you through this matter.