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Credit Counseling as a Bankruptcy Alternative
from:Sometimes it is possible to seek a bankruptcy alternative through credit counseling. It is feasible to get deeply in a debt, but be able to avoid bankruptcy when certain conditions exist. First and foremost, if you earn enough income to pay your current monthly expenses and your debt payments, but have fallen behind because of high interest rates or a one-time financial emergency, then it might be possible to avoid bankruptcy. Also, if your secured debt such as your mortgage and car payments are current and it is the unsecured debt wreaking financial havoc, then credit counseling may be a good choice. There are plenty of other good reasons why you might consider seeking credit counseling.
You can find many different types of credit counseling agencies, nonprofits and for-profit businesses. You should be very careful about the company or agency you choose, because some of them charge high fees. That means a significant amount your monthly payment would go to pay fees and not your debt. The best place to start when looking for a reliable and experienced credit counselor is with a bankruptcy attorney.
You should meet with the bankruptcy attorney in order to determine if credit counseling is even the path you should pursue. Credit counseling is usually only suggested instead of bankruptcy when two conditions can be met. First, you have to be able to budget your money and adhere to a repayment plan. Second, you only need to get interest rates lowered on unsecured and maybe some of the secured debt in order to get your payments lowered.
Credit counseling involves listing all of your income and debts. You are assigned a counselor who then contacts each of your debtors. In most cases, high interest rates on credit cards can be reduced and the credit card companies agree to accept lower payments. In some cases, even secured debt payments can be lowered, because a company would rather not repossess personal property if at all possible. Normally though, only unsecured debt is included in the repayment plan. Once the counselor has obtained the new payment amounts, a total monthly sum payment is calculated which includes a fee. You then pay that one amount to the credit counseling agency which distributes the payments to the credit card companies or other debtors.
For many people, credit counseling offers a bankruptcy alternative. You are able to avoid filing a bankruptcy that remains on your credit records for 10 years. The credit management services are often able to negotiate lower interest rates so you can restore your financial health. It's always best to avoid bankruptcy if possible, but when you need to actually reduce your debt, rather than just the payments, then bankruptcy is the best solution.
A bankruptcy attorney can review your financial status and advise you as to the best course of action.
Bankruptcy Mortgages News
Mortgage and Securitization Fraud: Where Is the Task Force? - Huffington Post (blog)
Mortgage and Securitization Fraud: Where Is the Task Force? Huffington Post (blog) They told members of Congress that the banks were drowning in bad debt and without a massive bailout they would soon be forced into bankruptcy. Congress quickly coughed up the money in the form of $700 billion in TARP loans. |
Ally Financial says its Residential Capital mortgage unit seeks Ch.11 ... - Washington Post
 USA TODAY | Ally Financial says its Residential Capital mortgage unit seeks Ch.11 ... Washington Post Residential Capital LLC, or ResCap, filed for Chapter 11 bankruptcy protection in New York, unable to make payments on debt taken out to finance soured home mortgages. The filing will separate the money-losing ResCap subsidiary from Ally's auto loan ... Former GMAC puts mortgage unit in bankruptcy Ally Fincl: Rescap Mortgage Subsidiaries File Chapter 11 Ally to Sell Non-U.S. Units as ResCap Mortgage Goes Bankrupt |
As Predicted, Ally Bankruptcy Will Delay Loan Modifications, Settlement ... - Firedoglake
As Predicted, Ally Bankruptcy Will Delay Loan Modifications, Settlement ... Firedoglake When Ally Financial's mortgage unit Residential Capital filed for bankruptcy last week, I had an inkling it would spell trouble for the foreclosure fraud settlement the parent company signed with state and federal regulators. How would individuals get ... Bank's no Ally for NY homeowners |
Ally Financial's ResCap mortgage unit seeks bankruptcy protection - Los Angeles Times
 New York Times | Ally Financial's ResCap mortgage unit seeks bankruptcy protection Los Angeles Times AP The US government is hoping that the bankruptcy filing by Ally Financial Inc.'s troubled mortgage business will help the company repay its government bailout faster. Residential Capital, or ResCap, filed for Chapter 11 bankruptcy protection in New ... Ally's Mortgage Unit, ResCap, Files for Bankruptcy Ally Financial's ResCap mortgage unit files for bankruptcy Bankruptcy aims to free Ally of bad mortgage assets after auto rescue |
Buffett Said to Have Sought ResCap Purchase Before Bankruptcy - Bloomberg
 Bloomberg | Buffett Said to Have Sought ResCap Purchase Before Bankruptcy Bloomberg Buffett sought to avoid a ResCap bankruptcy filing because Berkshire had unsecured debt in the mortgage unit, according to the people. Detroit-based Ally turned down the Weschler proposal after deciding that a bankruptcy filing and sale better ... Allstate, AIG And Others Named to ResCap Creditors Committee |
Bankruptcy may be best option for Ally's mortgage unit - Reuters
 International Business Times | Bankruptcy may be best option for Ally's mortgage unit Reuters By Melissa Mott May 8 (IFR) - If the mortgage unit of loan giant Ally Financial files for bankruptcy this weekend as expected, there will be one immediate reason -- the company could default on $1bn of debt on Monday. The filing, expected on Sunday ... Mortgage Unit Troubles Ally Financial Ally Received Treasury Approval on ResCap Bankruptcy: Report |
Business briefs for May 22 - Tbo.com
Business briefs for May 22 Tbo.com More than 20 affiliates also entered bankruptcy, including Broderbund LLC and Classroom Connect Inc. The government has sued several big banks over toxic mortgage securities they issued that were bought by two small Illinois banks which failed in May ... |
Bankruptcy may be best option for Ally's mortgage unit - Reuters
 New York Post | Bankruptcy may be best option for Ally's mortgage unit Reuters By Melissa Mott May 8 (IFR) - If the mortgage unit of loan giant Ally Financial files for bankruptcy this weekend as expected, there will be one immediate reason -- the company could default on $1bn of debt on Monday. The filing, expected on Sunday ... ResCap Nears Bankruptcy Filing Ally Said to Get ResCap Bondholder Backing for Bankruptcy Ally Gets Nod for ResCap Filing as U.S. Seeks Repayment |