What are my Alternatives to Bankruptcy?

When you are struggling with a substantial amount of debt, bankruptcy can seem like the only option. But this is not always the case. Depending on your individual circumstances, you might be able to work your way out of debt without filing for bankruptcy. This can mean avoiding suffering a damaged credit score and having to work with the court to complete the bankruptcy process, which can be time-consuming and invasive.

The best way to determine if you should pursue bankruptcy or not is to discuss your case with an experienced bankruptcy lawyer. During your consultation, your lawyer can go over your options and help you decide if one of your available alternatives, such as one of the options listed below, is a better choice for your case.

Consider a Debt Management Plan

If your debt is still at a level where you can reasonably manage it by making adjustments to your budget and lifestyle, consider a debt management plan. These are usually offered by credit counseling agencies, so be careful to choose a reputable organization to help you repay your debt.

Debt Settlement

You can potentially avoid bankruptcy by settling your debts with your creditors privately. Ask your lawyer if this could be an option in your case. If it is, your lawyer will play a role in settling your debt by negotiating with your creditors on your behalf. The negotiations might involve an upfront payment from you for a specific percentage of the debt in exchange for forgiving the rest of your debt amount.

Find Out if you are Judgment Proof

You could be in a position where there is no action a creditor can possibly take against you. This is known as being judgment proof. Although you can still face criminal penalties for failing to pay certain debts, such as child support, when you are in this situation, there is nothing creditors can do to recover your debts if you have no income and no assets they can legally take. This is an option for individuals who truly have nothing beyond basic household necessities.

Consolidate your Debts

You can also consider opening a new loan, a debt consolidation loan, the get a better handle on your debt. With this type of loan, you can take out a single loan to satisfy your creditors, leaving you responsible only for this one, larger loan. For many individuals having one loan to pay off makes it easier to get out of debt.

Work with an Experienced Merrillville Bankruptcy Lawyer

Sometimes, bankruptcy is the only way to get out of debt. In other cases, it is not. To find out if you have options other than bankruptcy and if one or more of these options is a better choice for you, speak with an experienced bankruptcy attorney. Contact The Whitten & Whitten today to schedule your free legal consultation with Mr. Schmidt, during which he can answer any questions you have and help you make the right choice for your case.