Is it possible to get out of debt without declaring bankruptcy?
Is it possible to get out of debt without declaring bankruptcy?
You may be surprised to learn that, technically speaking, there is no such thing as getting out of debt. You may try your best, you may struggle, and you may even get close. But the only way to truly be "out" of debt is if you remove yourself from the equation entirely.
What we mean by this is that while you can stop paying your bills, and while some companies might be willing to write off the balance on their end (meaning you don't have to pay them back), you'll still owe it all in the end - because "debt" doesn't just include money due to financial institutions, it also includes money due to other people.
Whether it's a credit card company or a friend who lent you money, they will still expect payment one day - unless they decide to forgive what's left on their end, too. If they do forgive it, then it's gone forever and doesn't count toward your debt number anymore. But if instead they try to collect for years on end and get nothing back from you, then eventually they'll give up and write it off too - but that's not what we're talking about here. We're talking about paying back both
It is possible to get out of debt without declaring bankruptcy, although it's not always the smartest choice. It depends on your situation and how much you're truly in debt. If you're living paycheck to paycheck and are barely scraping by, you may find that declaring bankruptcy will help you immediately relieve pressure from your debts.
If you have significant assets like a house or other large property, it's possible that your creditors will work with you a little longer if you declare bankruptcy. By contrast, if you have a lot of equity in your home or other valuable property (like businesses), declaring bankruptcy can put that property at risk because of its connection to your debts.
The best way to get out of debt is to do it the right way: start by creating a budget based on what's actually coming in, then spend within those means. Then take on one debt at a time—either by consolidating or restructuring the loan (you'll want to consult with a financial advisor for this step). Once one account is paid off, move on to the next.
If you have any questions or in need a Bankruptcy Attorney, we have the Best Attorneys in Utah. Please call this law firm for free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
Disclaimer: This is not legal advice and is simply an answer to a question and that if legal advice is sought to contact a licensed attorney in the appropriate jurisdiction.
