W. Travis Garrison Commercial Law Blog on Lawyers.com

Avoiding bankruptcy begins with managing your finances in a level-headed way:

• Not running up credit cards
• Budgeting your spending
• Setting aside reserves for emergency situations
• Systematically increasing your income
• Investing your money wisely
• Planning and saving for the future

Despite careful and practical planning, even the most dedicated and savvy financial manager can face the unexpected—such as a contentious divorce or sudden serious illness.  In the event of unforeseeable financial disasters, you must shift gears and do everything possible to solve debt before resorting to bankruptcy.
When a financial situation becomes dire, alternative approaches to bankruptcy include: 
 Using an approved credit counseling agency (http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources/ApprovedCreditAndD ebtCounselors.aspx).  Working with a non-profit approved credit agency you may be able to reduce interest rates and payments due.  Debts are consolidated into a Debt Management Program (DMP) which allows one monthly payment.  Credit counseling is a prerequisite for filing bankruptcy per 2005 bankruptcy law changes.  At the very least, if bankruptcy is inevitable, you complete that requirement.
 Negotiating debt settlement with creditors.  You can call creditors yourself and attempt negotiating reduced interest rates or lower payments.  You can also negotiate a settlement to pay of the debt in a lump sum.  Work to settle older debts that have gone to collection agencies first rather than more recent debts.  If you find you do not have the horsepower necessary to pull off a negotiation, many bankruptcy law firms in Ohio today help clients in negotiations with creditors.  
 Sell assets to pay off debts.  Downsizing and buying a less expensive car or selling your house and moving into a smaller one may provide funds to handle debt.  Giving up assets is hard, but cutting costs is a way to overcome increasing debt.
 Debt consolidation loan.  Another approach is to use your equity, such as a home, to take out a second loan and pay off debts.  The risk involved is that you stand losing your home if you fail to pay on the consolidation loan.
 Increasing your income.  Whether working a second job, getting a higher paying job, or getting a raise at your current job, increasing income provides more money to pay off debts.

Experienced Ohio bankruptcy lawyers advise bankruptcy as a last resort.  Discuss other alternatives first to make sure you exhaust all your options.

Cupps & Garrison, LLC
35 East Gay Street, Suite 402
Columbus, OH 43215
Phone: 614-441-8603