The current level of economic weaknesses in the American dollar means more and more people are looking for an alternative to bankruptcy. With the current pace of foreclosures, and banks themselves struggling to stay solvent, lets look at some basic information on alternatives to bankruptcy.
What are the alternatives to bankruptcy? The first and foremost alternative to bankruptcy is of course do not go into debt. While this is not a likely example, it is of course the example with the most common sense. No collection agencies will come calling on you if you have not gone into debt to anyone.
For those who are in deep debt, which is the majority of people nowadays, a very popular alternative to bankruptcy is to consolidate. Consolidation of debt can be a true source of financial relief if you can have everything piled into one bill. It gets even better if that one bill is being paid at a lower interest rate than some of your past debt. While this will buy you more time to pay, it will ultimately not lower the debt, but increase it. For many this is acceptable practice, therefore debt consolidation companies exist.
If you can not consolidate your bills, another alternative to bankruptcy is to go to your creditors and arrange a meeting to see if they will allow you to pay less per month, or perhaps lower the debt altogether. This type of debt negotiation can be successful in some instances. There are some professional debt negotiation companies who are out to make a profit from your debt. Some masquerade as non profit agencies, there to help the public out of their debt problems. Be especially careful when speaking with debt negotiation companies about alternatives to bankruptcy. The Federal Trade Commission ( FTC ) has written a release about the ” National Consumer Council ” and the complaint filed against this company masquerading as a nonprofit debt negotiation organization.
Debt settlements or debt settlement proposals are not a valid alternative to bankruptcy. A good example of a debt settlement is one where you pay a company that claims they can ultimately lower your debt. Just this one sentence should tell you that the debt settlement company is there to take more of your money. They will be charging you fees for their service, which takes an even larger amount of your money. Stay away from debt settlement companies since they are practically the same as a debt negotiation company.
Alternatives to bankruptcy are usually found by speaking with bankruptcy attorneys. One may consult with credit advisors, but should always speak with a lawyer and in particular a bankruptcy lawyer when determining whether to file for bankruptcy or when seeking alternatives to bankruptcy.
If you are unsure about whether bankruptcy is right for you, or would like to learn more about bankruptcy and alternatives to bankruptcy. Consult with one of the bankruptcy attorneys at Bankruptcy ESQ. Our bankruptcy lawyers can evaluate your current financial situation and recommend the options that are available. Call today and see if bankruptcy affords you the peace of mind that you are seeking.
Bankruptcy ESQ office locations: Los Angeles, California, Miami, Florida, Seattle, Washington