How to Avoid Chapter 13
- 1). Increase your income so that you will have additional funds available to pay your debts. You can accomplish this by working extra hours or working a second job. Bringing in additional income can help you double up your payments to decrease your debt dramatically.
- 2). Reduce your spending by eliminating unnecessary expenses. Cutting down on things you don't need, such as your daily afternoon coffee drink can help you save money. Instead, try to cut costs by making coffee at home and bringing it with you.
- 3). Negotiate your debts with your creditors directly. Creditors will often settle your debt for pennies on the dollar if you agree to make a prompt payment. This can reduce your balance drastically, eliminating a large portion of your debt.
- 4). Sell some of your assets to increase your liquid cash. If you find yourself to be in a situation where your debt has become unmanageable, but have assets to liquidate, you should liquidate some of your assets to help pay your debts. If you don't, the U.S. Bankruptcy Trustee will have the power to liquidate your assets, and at a much lower value.
- 5). Apply for a debt consolidation loan. Debt consolidation loans are special loans that help you save money by reducing your interest rates to help you pay off your debt faster. Your debt will be wrapped together in one monthly payment, making becoming debt free an attainable goal.
