subject: Are There Worthwhile Alternatives To Bankruptcy? [print this page] In the past few years Americans have been through difficult financial times. Many people have lost jobs while credit has literally dried up.
It is easy to forget that one of the reasons why we ended up where we are now is that for many years we had access to easy credit from lenders who were eager to extend personal loans and mortgages even to people whose credit ratings were woefully low. The result was that when it was time to pay, millions of people couldn't. That's not all. Americans are fond of debt anyway, and which is well attested to by the huge volumes of credit card debt. When we put these two factors together we end up with a situation where people have huge debts that they have no idea how to pay.
Fortunately, you can now take proactive steps to free yourself from debt. In this you need to consult a Plano bankruptcy attorney who will guide you through a number of alternative routes that you can use to get out of insolvency.
Many people wrongly assume that bankruptcy is the only way out of debt. However, as your Plano bankruptcy attorney is mandated to inform you, there are several alternatives in this regard, one of which is a negotiated settlement.
In this option the defaulter and the creditor enter into negotiations, often mediated by the Plano bankruptcy attorney, with the aim of coming up with a repayment plan for the debt. There are a number of benefits that come with this option. The debtor can negotiate with the creditor to lower the amount of debt owed or to reduce the amount of interest. The two parties therefore agree on a favorable payment plan that will ensure the debts are fully repaid. The defaulter thus avoids the stress associated with repossession while the creditor gets a guarantee of payment. During this period of negotiations the creditor is barred from making any move to attach the defaulter's assets. Debt settlement negotiations can be arduous and may take long but in the meantime the debtor can continue with his or her life uninterrupted.
The second option that your Plano bankruptcy attorney might recommend is a debt consolidation or debt management. Here all your debts are combined and you are then required to make monthly payments. It may take longer to repay the entire debt but this approach is less stressful and it does not interfere with the debtor's life or cause him/her much embarrassment.
These two options are both recommended over bankruptcy because they do not damage your credit ratings in the long term. If you opt for bankruptcy you may have a quicker exit from your debt situation but your credit reports will highlight the bankruptcy for the next ten years and this can disadvantage you greatly if you need to obtain loans from banks. Besides, for these two options you are not obligated to surrender any of your assets to be sold off as is the case with a Chapter 7 bankruptcy. Persons saddled with debt should therefore realize that they are not alone and that an apt solution can be found upon engaging a Plano bankruptcy attorney.
