Top Five Bankruptcy Alternatives That You Should Know

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Whenever the debts go so high, people who are so much in debts, think that filing personal bankruptcy is the end of all their financial problems. But at this point, they keep forgetting that once the bankruptcy is filed, all assets are lost, and all debts are consolidated and eliminated, but the credit score goes down drastically too. So do some research, you will find so many bankruptcy alternatives that can help you pay off debts.

In this article, I am going to tell you about the top five alternatives to bankruptcy which is relatively better than the bankruptcy itself.

Revised Terms

Debt Consolidation is one of the best alternatives to bankruptcy; it is most suitable to those who are into debts with so many different lenders.

In this process, the entire repayment terms is revised, and by taking a debt consolidation loans, the existing debts can be paid off, and the loan that is taken to pay off the debts can be paid easily with simple monthly installments.

The main motive of this alternative is to enable payment of debts to one creditor in easy terms of payment and pay off all existing debts.


Sometimes debts may increase, because of the fact that debtors couldn’t meet the monthly payments regularly, which can affect the credit score too. This may be due to no income to pay off the monthly commitments.

At this point of time, the best alternative is to do direct negotiation with the creditors, explaining them the financial situation you are into and get an extension in the repayment period or change in interest rates to make it relatively easier to pay off debts.


The third alternative to bankruptcy is simple yet complicated. In case you don’t want to go in for bankruptcy, and no enough assets to pay off the debts, nor enough money to pay off the monthly interest, the best option for you is to quit paying.

Once you quit paying and the creditor couldn’t get any information about you, after seven years the credit would automatically be written off, and it ends the worries of debtors. But this alternative is not among the best, so always explore other choices, before planning to resort to this alternative to eliminate debts.


Another alternative for those who want to continue their business, though their credit points are not that good, debt restructuring is the option available.

In this, the debtor can directly negotiate with the creditors, and get adjustments in the amount of loan to be paid, or interest rates or the repayment terms, which would make it relatively easy for the customer to pay off the debts.

Financial Management

The best alternative to bankruptcy is better financial management. It is very difficult to get off debts once gone into it.

But what if it can be avoided by cutting off all not so vital expenses from the bills. If this can be done right from the start, or at least after getting into too much debt, bankruptcy can be totally avoided, because when finance is effectively maintained, there would be no need to go in for any bankruptcy alternatives.