Over the course of any life, we all acquire things that have assigned values. Cars, homes, furniture, or even electronics hold a value for a long time. If you are in the midst of a financial crisis and are looking for an alternative to filing bankruptcy, liquidation of these assets may provide you with the breathing room you need.
Liquidation is the process of selling off assets for cash. In this case, you would be liquidating your assets to pay off your creditors. Ironically, some of your creditors are most likely assigned to many of these assets. The easiest way to pay off a car loan is to sell the car. Even if you cannot get the whole value you need, every dollar you can accumulate will help. I am not suggesting that you put your dining room set on eBay or anything. There are certain things that one simply will never part with or cannot part with. However, when evaluating an alternative to filing bankruptcy it is important to remember that you could lose much of this stuff should you need to file for bankruptcy.
If you would lose your car in a bankruptcy filing, why not just sell it now and use that money to avoid the bankruptcy. You will still be without a car, but you will retain your credit score. Liquidation as an alternative to bankruptcy is about prioritizing your assets. Which can you live with or cannot live without? Ask yourself this question about all of your possessions and you may be able to generate enough money to fend off bankruptcy at least a little while longer.
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|Jennifer Mathes, Ph.D.|