New here? Start with these articles to learn about US bankruptcy, debtor bankruptcy
alternatives like debt consolidation, debt settlement, debt negotiation, and debt management.
You'll also learn the causes of debts that can lead you to file bankruptcy and how to recover
from it.Milwaukee Bankruptcy Lawyers Discuss Bankruptcy Alternatives
No one wants to declare bankruptcy. Declare. Sounds as if you’re going to shout it from the roof, doesn’t it? When, in reality, most of us avoid taking action until it is too late to do anything else. Part of human nature, I guess. Most people can cite, in retrospect, something they wish they’d done differently - changed jobs, reduced their spending, thrown away their credit cards. More than 91% of bankruptcy filings are due to circumstances beyond the debtor’s control, directly at least - medical bills, divorce, job loss. And while seeking an alternative to such a drastic action would be good, if done in time, most of us don’t conceive of what “in time” might mean. Remember the old adage about forgetting to drain the swamp when you’re up to your hips in alligators? Same thing applies here. But, pursuing some of these alternatives to another end before you file for bankruptcy may reduce you debt and make the situation more manageable, for both you and Milwaukee bankruptcy lawyers.
Informal arrangements with creditors
Making informal arrangements with mortgage holders or credit card companies may seem like a good idea, but can often carry unforeseen consequences and even deepen your financial problems. Credit card companies often have in the fine print of your contact with them the provision that they can raise your interest rate and lower your credit limit at any time and for any reason. Hence, a well-intentioned phone call to the credit card company to try and delay or reduce the payment due may result in your interest rate being increased or worse, doubled. And, as an added bonus, some credit card companies retain the right to apply this increased interest rate to you existing balance, not future balances, leaving you more indebted than when you started
Consumer credit counselors
This term covers a wide variety of businesses with a wide variety of intentions and expertise. As debt levels have risen, so have the number of shady businesses advertising themselves as saviors to your credit woes. They claim to be able to repair your credit or negotiate with your creditors - all for an up front fee, usually a hefty one. However, oftentimes, the debtor is left with more arrearages and emptier pockets as the professed credit counselor slips away into the night with the up front money. Everett bankruptcy attorneys maintain a list of legitimate consumer credit counselors.
The workout
Another more formal arrangement is the workout. A workout is a mutually negotiated and agreed upon agreement between a debtor and his or her creditors in which terms for repayment are defined. A “composition” workout is a contract between a debtor and his or her creditors in which the creditors agree to accept a reduced amount of money for settlement of the debt in full. In an “extension” workout, the creditors agree to accept less money for a longer period of time until the debt is paid in full. A Chapter 13 bankruptcy does all of the above, except you are negotiating these payment terms while under the protection of the Chapter 13 and its auspices. Milwaukee bankruptcy lawyers can help you decide, under the new bankruptcy reforms, whether a Chapter 13 bankruptcy is for you or if a Chapter 7 bankruptcy would better fit your situation.
Contact Milwaukee bankruptcy lawyers for further information.
About the Author:
When faced with overwhelming debt and the possibility of bankruptcy, Milwaukee bankruptcy lawyers can offer advice and help get your financial situation back under control.
Nick Messe | Bankruptcy Basics |
Tags: bankruptcy alternatives, bankruptcy attorney, bankruptcy filing, bankruptcy lawyer, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy
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