While filing for chapter 7 bankruptcy is often the best remedy for many debt problems, other courses of action may sometimes make more sense. They include:
Negotiating with your creditors.
If you have assets that you are willing to sell or if you have some income, you may be better off negotiating with your creditors than filing for bankruptcy. Through such negotiation, you may be able to come up with a new payment plan that allows you to recover financially. Or you may be able to settle your debt for less than what you owe.
Getting outside help to design a repayment plan.
If you do not want to negotiate directly with your creditors, you can have an attorney or a credit-counseling agency do it for you. Both lawyers and credit-counseling agencies will attempt to negotiate a repayment plan with all of your unsecured creditors. You make one monthly payment to the lawyer or agency, which then distributes the payment to your creditors as provided in the plan. As long as you make your payments on time, your creditors will not take any action against you.
Paying over time with a chapter 13 bankruptcy.
In a chapter 13 bankruptcy, you enter into a court-approved plan to deal with your debts over three to five years. Some debts must be paid in full, while others may be paid only in part. The basic principle is that you must devote all of your disposable income to the plan approved by the bankruptcy court.
Doing nothing at all.
Believe it or not, the best approach for some people who are deeply in debt is to do nothing at all. If you have little income or property and do not plan on acquiring more in the near future, then anyone who successfully sues you will not be able to collect anything because you do not have anything they can legally take. And except in very unusual situations (such as willfully refusing to pay child support or being a tax protester), you cannot be put in jail for failing to pay your debts.
To review your bankruptcy options, call Ron using the phone number or contact form below.