The short answer is Yes.
The first thing you should do before filing for bankruptcy is contact all the people you owe money to and see if there is a way that you can work out a repayment schedule. You might be surprised how cooperative creditors might be if you call and show interest in paying back the debt. You can also mention that you’re thinking about filing for bankruptcy if you can’t find a way to pay back your debts. This often makes creditors much more willing to work with you because they know that if your bankruptcy is granted, they’ll never have their money paid back to them.
If you don’t feel comfortable contacting and negotiating with creditors yourself, you can hire a non-profit credit counseling service to do this for you. This service will contact everyone for you, and they’ll also work with you to help you repay your debts. While they may not offer a loan to help you pay them off, they will help you create a plan that works for you and is reasonable and that will help you repay your debts in a timely manner. These professionals can also give you inside tips on how creditors, banks, bankruptcy, and loans work so you can have a better idea of which options are best for you.
After you call your creditors you might then want to consider calling a lender for a debt consolidation loan. These loans are available from banks or private debt consolidation lenders. With this type of loan, the lender will consolidate all of your debts into one amount. They will then pay back all of your creditors and you will have a loan outstanding with them to pay back the full amount paid. Debt consolidation loans can often come with reasonable and affordable repayment plans and can be a great alternative to bankruptcy. It’s important to know that these loans come with interest rates attached and they vary greatly from lender to lender.
Using a credit counseling or debt counseling program is often compared to a Chapter 13 bankruptcy, because it allows you to create a repayment plan to repay your debts. However, using a credit counseling program doesn’t affect your credit negatively in the same way that filing a Chapter 13 does. However with a Chapter 13, creditors are very limited in the collections actions they can take should you miss a payment. When using a debt counseling program, creditors can start collections actions as soon as you miss one payment, putting you right back where you started. Also, if you use a debt counseling or credit counseling program, you’ll be required to pay back the full amount of your outstanding debt. Often if you file for Chapter 13 bankruptcy, the amount you’ll need to repay is a much smaller amount than what is actually outstanding.
Surprisingly, one of the best things to do when you’re facing extreme financial difficulty is to do nothing. That debt will eventually be written off by creditors, and it will eventually be wiped from your credit history – although this is likely to take as long as having a bankruptcy claim on your report will.
By the time most people are at the point of considering bankruptcy, they have no assets left to lose. It’s very easy for creditors to find out that someone has no assets and so, they’ll see that litigation against you is not worth it simply because they have nothing to gain by suing you. Doing nothing will take a very long time in itself and like bankruptcy, should only be considered as a last resort.
5/29/2020 02:27:15 am
My dad's company is not doing great financially because their investors pulled out. That's why we're thinking of hiring an attorney that specializes in bankruptcy cases. I'm glad you shared this because I never knew that with chapter 13, we'll be allowed to customize a repayment plan when it comes to repaying debts.
9/1/2021 03:31:57 am
Thanks for Nice and Informative Post. This article is really contains lot more information about This Topic. We have read your all the information some points are good . Great post I would like to thank you for the efforts you have made in writing this interesting and knowledgeable article.
9/1/2021 10:37:15 pm
This post is very easy to read and understand without leaving any details out. Great work! Thanks for sharing this valuable and helpful article.
9/1/2021 11:56:20 pm
Good blog post !!Your work was very impressive; I really appreciate the research part of it which made your article very rich and understandable. Overall you have done a great work.
3/1/2022 03:41:30 am
I liked how this article pointed out that credit counseling permits you to build a repayment program to be able to repay your debts. My sister needs credit counseling since she's looking at alternatives to bankruptcy. I think she should look for a financial planning firm that provides a credit counseling program that's applicable for her.
Leave a Reply.
Kill Bills Bankruptcy Attorney is committed to serving our community!