If you are buried in debt, chances are that you are looking for a way out from under the heavy financial burden. In most cases, individuals in debt are contacted by debt collectors on a daily basis, making life difficult to enjoy. Depending on your circumstances, you may be considering bankruptcy. While this is a viable option for some, there are alternatives to filing bankruptcy that could work better for you.
Before you file for bankruptcy, there are some things you need to be aware of. Most people find the most troubling aspect after filing bankruptcy to be getting approval for various types of loans. Having a bankruptcy on your credit record usually prevents you from being approved for conventional mortgages and car loans, at least for the first few years after filing.
So what are the alternatives to bankruptcy? Depending on how far in debt you are and how much income you have, there are ways to deals with debt issues.
Check Debt Collection Laws
If you are being harassed by debt collectors, it would be best to look into collection laws. Having debt collectors hound you every day can be tiresome and only adds to the stress you already have regarding your debt. If debt collector harassment is your primary concern, bankruptcy is probably not your best option. Look into your legal options and go from there.
Work with Your Creditors
Depending on your financial circumstances, you may be able to make monthly payments to minimize your debt. However, your creditors may be charging you more than you can afford each month. If this is the case, try reaching out to your creditors to negotiate smaller monthly payments. In many cases, creditors will decrease your monthly payment if you have an active repayment history. In the simplest terms, creditors just want their money back and they will likely work with you so that you can pay back what you can, even if it takes longer.
Credit Counseling Assistance
There are non-profit credit and debt counseling agencies out there to assist you in your debt repayment. These agencies help you figure out a repayment plan that works with your income by working with your creditors.
Similar to Chapter 13 bankruptcy, debt counseling will help you pay your debt back over an extended period of time. Debt counseling does have one advantage over Chapter 13: you get assistance with repayment, but you will not have bankruptcy on your credit history.
However, be aware that there are scams out there involving credit counseling agencies. In many cases, these agencies are funded by the very same creditors that you are trying to pay back. There could be a conflict of interest depending on what agency you turn to and who your creditors are.
No Action
In some rare cases, doing absolutely nothing may be your best option if you are deeply buried in debt. If you have minimal income and few valuable assets, you could be considered “judgment proof.” What this means is that if someone were to sue you, they would not be able to collect anything from you because you do not have anything valuable to collect.
Contact an Attorney
If you are carrying significant debt that you can no longer handle, contact an experienced bankruptcy attorney. The attorneys at Clear Counsel Law Group are here to help you figure out the best plan of action for your individual circumstances so that you can get on with your life. Call today to set up an appointment.
