bankruptcy lawyer

Bankruptcy Alternatives

Personal bankruptcy can bring a fresh start to the individual who is struggling to get out of debt, but it is certainly not the only option. Those considering bankruptcy should first verify that it is indeed the proper course of action for their situation. A number of alternatives do exist, and they ought to be properly evaluating before filing bankruptcy.

What is Chapter 7 Bankruptcy?

With this type of bankruptcy, an individual petitions the court to discharge most of their remaining debts. In exchange for this discharge, the bankruptcy trustee can take any property you own that is not exempt from collection, sell it, and redistribute the proceeds to your creditors.

Debt Consolidation

Debt consolidation is one possible alternative to filing bankruptcy. A debt consolidation loan allows you to combine all of your debts into a single loan repayment. This can dramatically ease your debt management; rather than worrying about several different repayments and their respective interest rates, your debts become consolidated into one loan with a single weekly or monthly repayment. Getting approval for a debt consolidation, however, may be difficult if your finances have become too unmanageable.

Debt Settlement

Debt settlement has become increasingly more popular as a bankruptcy alternative. An accepted debt settlement agreement is not to be taken lightly, as it is a formal agreement bound by law. If you have some income, or you have assets you're willing to sell, you may be a lot better off negotiating with your creditors than filing for bankruptcy. Negotiation may buy you some time to get back on your feet, or your creditors may agree to settle your debts for less than you owe.

Design a Repayment Plan With Outside Help

Many people aren't comfortable negotiating with their creditors or with collection agencies. Perhaps you aren't confident with your negotiation skills, or the creditors and collectors are so hard-nosed that the process is too unpleasant to stomach. If you don't want to negotiate on your own, you can seek help from a nonprofit credit or debt counseling agency. These agencies can work with you to help you repay your debts and improve your financial picture. Visit the website of the United States Trustee to find out about agencies in your area.