Nobody wants to file bankruptcy unless it is their last option.  In my office, I have every client sign a paper indicating that they believe that bankruptcy is their last option.

Whenever you look at your options, be sure you look at all of your options, including ones you don’t think you’d like, then pick the one that’s best for you.  Be sure to “rise above the treeline” to see where each road goes.  If can’t see yourself going all the way down a certain road, then should you even take one step in that direction?

Below is an alternative to filing bankruptcy.  Most of the clients I see for an initial consultation decided to come to my office because this option did not work for them and they wanted to discuss options that would work.

Keep Doing What You’ve Been Doing To Handle Your Debt.

This usually involves choosing which bills to pay first, if at all.  Although that is an option, it is most likely NOT a viable option for you.  If it “doing what you’ve been doing” can work for you, then you wouldn’t be looking into other options.  So, you have to do something different.

This usually involves choosing which bills to pay first, if at all.  Although that is an option, it is most likely NOT a viable option for you.  If it “doing what you’ve been doing” can work for you, then you wouldn’t be looking into other options.

My view on this option, and all others, is this: If you can’t see yourself going all the way down a certain road, then why take even one step in that direction?

Here’s a case in point involving a 75-year-old lady that came in for an initial consultation:  The monthly minimum payments on her credit cards were $750.  She was current on all of her credit card payments, until she suffered a $450 drop in her monthly income.  After the drop in income, she could only pay $300 toward her credit cards.  She paid the ones that she could afford, but left alone the ones that she could not afford to repay.  Her reasoning what this: “Hey, I’m paying all that I can afford to pay.”  That worked for the credit cards she was paying, but not for the ones she couldn’t afford to pay.

She came into my office because she just got served with a lawsuit from each of the two credit card companies that she stopped paying.  She had no cash savings; she was living paycheck-to-paycheck.

I told her that when she got to the point that couldn’t pay all of the credit cards, she should have stopped paying all of the credit cards.  My thought is this: If you can’t them all, then why pay at all?

Although paying what she could afford was a valiant effort, she exposed herself to a lawsuit – actually two of them – at a time she had no cash reserves.  How was she going to pay for credit card lawsuit defense, or some other option, if she didn’t have any cash?  Fortunately, we were able to craft a strategy to keep her protected, and she had to stop paying the other credit cards so that she could save up some money to exercise some of the options available to her.  Most often, if you are out of cash, you may be out of options that will work for you.