When you end up in serious financial trouble, it may seem like you don’t have a lot of breathing room to pay off your debt and move on with your life. Some people seriously consider bankruptcy as the only available option they can use to get out of debt. However, there are five alternatives to bankruptcy that can be used to help you move on with your life and overcome your financial difficulties.

Debt Negotiation

One of the avenues to consider is debt negotiation. With this, you will end up avoiding bankruptcy since you can work with creditors to come up with a debt negotiation. This allows you to come up with an arrangement where you pay back your debts, without forfeiting assets. You will end up with a single monthly loan payment and you normally get a lower interest rate for the debt consolidation loan. If a lender feels that you are planning to repay your debts honestly, they will be happy to negotiate with you.

Borrow Money

This is a great way to get a loan without interest, helping you pay back your debts quickly. You have to be careful when you borrow from friends and family, as you could damage relationships with them if you do not hold up your end of the contract. You need to create a budget to make sure you can repay the debt on time, and to ensure you are not in danger of going bankrupt, as it could hurt your relationship.

Sell Assets

Selling various items can net you thousands of dollars. If you declare chapter 7 bankruptcy, you will end up losing all of your assets, so take the time to go through your assets and sell what you do not need, making it easier to pay off your debts. The nice thing about this method is that you are in control of what gets sold off and what doesn’t. Some easy ways to get started include selling items on eBay, craigslist, and other places online.

Credit Card Balance Transfer

Based on your credit rating, you may still qualify for a lower interest rate credit card. Using a credit card balance transfer will give you plenty of time to pay off the debt sooner, as most cards have low introductory rates to lure in new customers. Just make sure you are taking advantage of paying off the card so you don’t end up racking up more debt on the new cards and the balances you have paid off.

Mortgage Restructure Loan

Tapping into your home’s equity can give you some extra money you need to pay off your debt. You need to look at if you want to restructure or refinance your mortgage to get the extra money to pay off debt. It can help you avoid bankruptcy, but you have to be aware that you can become underwater in your mortgage if the market changes and you still end up getting your home foreclosed upon.

This article was written by Lindsay Bruce.  Lindsay loves to share her knowledge of finance though blogging.  If you are looking at Bankruptcy Alternatives, she wants to assure you that there is a light at the end for the tunnel.