How to Avoid Bankruptcy With Debt Consolidation & Unsecured Loans
- 1). Contact your existing creditors and explain to them that you are pursuing debt consolidation and the possibility of unsecured loans as a means of avoiding a bankruptcy. Advise them that if you file for bankruptcy protection you will file under Chapter 7. Chapter 7 is the type of bankruptcy that results in the discharge of your debt, leaving your creditors with no ability to collect on your accounts. By advising creditors of your intentions and the prospect of Chapter 7 bankruptcy, they likely will be supportive of your efforts to consolidate debt and obtain additional financing because their best interests are served through this course as well.
- 2). Apply for a debt consolidation or unsecured loan initially with any of your creditors that are banks or similar types of financial institutions.
- 3). Contact a loan broker. There are loan brokers in business that specialize in assisting people attempting to avoid bankruptcy. These professionals assist in connecting people like you with lenders that specialize in loan consolidation and limited supplemental financing for people dealing with debt issues who want to stay out of the bankruptcy court. These loan brokers do not charge you a fee for their services. They are compensated by a lender if a debt consolidation loan or other type of financing is originated for you.