A Strategic Guide to Bankruptcy Alternatives
Even when people are struggling to pay their bills and the delinquency notices are piling up, many people would like to avoid filing for bankruptcy if they can. They worry about the stigma that often comes with bankruptcy, and they worry about what bankruptcy will do to their credit (even though struggling with debt for years will actually be more damaging to their credit).
Misinformation is often the cause of people staying away from bankruptcy when they need it. Talking to a Gilbert bankruptcy attorney will help you get to the truth that can help you change your life and overcome your debt problems. If you still want to explore alternatives to bankruptcy, here are a few options:
Negotiate Directly with Creditors
Many times, your creditors may be willing to negotiate with you on what you owe. After all, they know there is a risk they won’t get anything if you are unable to pay and just keep getting more interest and penalties. You may be able to negotiate for a lower interest rate, or you may be able to offer the creditor less than what you owe in one lump sum.
Know that if you choose this option, you will need to contact each of your creditors individually, and not all of them will be willing to negotiate. You will also need to have a lot of cash ready to satisfy some debts. If you are struggling to pay already, chances are good that you don’t have those resources. You may be better off putting what money you have toward a bankruptcy lawyer in Gilbert.
Talk to a Credit Counseling Agency
Many people find themselves struggling with debt because they made some poor financial choices. In those cases, some good credit counseling and financial education can help them learn how to turn around their finances.
If you do decide to file for bankruptcy later, know that you will be required to take a credit counseling class anyway. It’s just good education that can help you build a stronger financial future.
Attempt a Debt Settlement
With a debt settlement, you negotiate a payment plan for what you owe. This requires negotiating directly with your creditors, but it is more likely to be successful because you are promising to pay all of what you owe. However, you will also continue to pay interest in most cases, and that can add hundreds or thousands of dollars to what you ultimately pay.
Under a Chapter 13 bankruptcy, you will also be on a debt repayment plan, but the amount you owe each month will be based on what you can afford, and your interest rate will be significantly lowered or eliminated. Under a Chapter 7 bankruptcy, you will have that debt discharged and won’t have to pay a thing.
While there are alternatives to bankruptcy, you can see that they don’t offer immediate relief, and they aren’t necessarily a sure thing. Your creditors may not want to negotiate with you, and other options may take too long and cost too much to give you real relief. In contrast, if you file for bankruptcy, you may be able to get immediate debt relief. If you qualify for Chapter 7 bankruptcy, you may be able to have all of your unsecured debt discharged. Or, if you file for Chapter 13 bankruptcy, you can reorganize your debt under an affordable payment plan that will be done in just three to five years. At the end of the time, you may be able to have your remaining debt discharged. You can get long-lasting debt relief.
Call Gilbert Bankruptcy Lawyers today to learn more about how bankruptcy may help you get the debt relief you need. We’ll examine your finances and help you understand whether Chapter 7 bankruptcy or Chapter 13 bankruptcy would provide you the maximum benefits, based on your financial goals, such as being able to keep your home or other assets. We’ll help you understand every step of the process and ensure that you have the knowledge to make the right choices for your situation. Call us in Gilbert today to meet with a bankruptcy lawyer and learn more about your options.