Explore Your Options Beyond Bankruptcy

Filing a bankruptcy case isn’t the only solution to financial problems. Sometimes another option may yield a better result.

Negotiate With Creditors

If you have money to settle your debts, you can try to negotiate with creditors to agree to take less than the full amount owed. While this can cost you less than paying in full, it means coming to terms with each creditor one at a time, and the difference between what you owe and what they agree you can pay may be reported to the IRS as taxable income.

Debt Consolidation

You may be able to borrow money to pay off your other debts with repayment terms you can afford. Consolidating multiple accounts into one, with a reasonable payment. This option may not be available if your debt is too high or if you can’t afford even a reduced monthly payment.

Debt Management through a Nonprofit Credit Counseling Agency 

There are nonprofit credit counseling agencies that help people reach payment agreements with creditors. These agencies charge a small fee to set up a plan in which you make payments to the agency, which immediately begins paying your creditors on terms they have agreed to, often reducing interest rates and waiving late fees. The creditors that agree to the plan will not try to collect from you as long as you are complying with the payment terms. However, not all debts can be included in a DMP, and sometimes the payments required aren’t affordable.

Commercial Debt Settlement Programs

You’ve probably seen advertisements for companies that claim to be able to reduce or eliminate your debts. I never recommend that anyone enroll in this kind of program. They charge very high fees, and they require you to build up a “trust fund” before they try to settle with any of your creditors. In the meantime, you are still subject to collection calls and lawsuits. Creditors don’t have to wait until they’re offered a settlement, and they don’t have to accept a settlement that’s offered.

Exploring Your Options

Bankruptcy is not the only solution to financial difficulties. Depending on your circumstances, options such as debt consolidation, debt settlement, credit counseling, or loan modifications may help you regain control of your finances. I want to help you decide on what solution is best for you. Get in touch with us today.