The headlines are scary. “Bankruptcy is at all time highs!”

Well, that may be, but you don’t need to be one of those statistics.

I know your situation might be dire and in some rare cases, bankruptcy may be the only way, but in most cases, it probably is not the answer.

DON’T GET SCARED INTO BANKRUPTCY

The number one reason why people file Chapter 11 is not because they have to, but because they think there is no alternative, that it’s the only way to escape the pressure and pain of their situation; to eliminate debt.

THERE IS ANOTHER WAY

It’s time to start thinking differently. No, I mean REALLY different. Look, if you are considering filing for bankruptcy and the creditors are breathing down your neck with harassing calls on a regular basis, it’s time for some serious action right?

TAKE CHARGE!

My debt advice to is, don’t get angry, just get seriously organized and start taking control of the situation. Your absolute top priorities should be the following;

1) Food & water (essentials only)
2) Shelter (mortgage or rent)
3) Clothes (the essentials)
4) Utilities (electricity, phone, etc.)

Everything else is secondary. Come up with a budget, track every dollar, cut all expenses that aren’t in the list above, stop spending on credit. You get the picture, right? This is your own personal debt elimination program.

If you have to sell stuff, sell stuff. If your situation is bordering on the repo man coming to take your car, big-screen TV or whatever, why don’t YOU sell it and take the proceeds instead.

WORK WITH THEM!

Work with the creditors. Send them a copy of your budget and tell them exactly how much they are going to get. Forget the minimum payments or whatever they tell you they want. You are going to pay them, BUT ON YOUR TERMS.

Be smart, polite and patient. Don’t be rude or disrespectful. Plan and communicate with them regularly and most will cooperate.

Just be diligent with the money you do have. Cancel the cell phones, turn off the cable TV, do what needs to be done and you can eventually come out ahead. There’s no quick fix here, but you can have debt elimination without bankruptcy.

I know it’s tough, but you need to be tougher. Be creative, get advice, take help from others and be realistic. If you have to visit the local food bank or sign up for food stamps, do it.

I won’t lie to you, this road is hard. But the difficulty in the short term is well worth it. Hang in there! YOU CAN DO IT!

About the author

Paul Smith is author of the highly acclaimed debt elimination program,