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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.
How To File Bankruptcy News
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Alex Hotel, Flatotel Owners File for Chapter 11 Bankruptcy - Bloomberg
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Houghton Mifflin Harcourt files for bankruptcy - Christian Science Monitor
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Issue of Harrisburg filing for bankruptcy still a point of contention - CBS 21
Issue of Harrisburg filing for bankruptcy still a point of contention CBS 21 This number has been growing over the past year as the city has been unable to file for bankruptcy. In June of last year, the state legislature passed a law amending the state's fiscal code to prohibit financially distressed cities from entering into ... |
Filings detail Starr County candidate's bankruptcy, tax history - Monitor
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Commander bankruptcy delayed for fourth time - Southeast Missourian
Commander bankruptcy delayed for fourth time Southeast Missourian By Scott Moyers ~ Southeast Missourian This file photo shows the former Commander Premier Aircraft Corp. 52000-square-foot municipally-owned hangar at the Cape Girardeau Regional Airport on Sept. 26, 2011. TYLER, Texas -- A federal judge for the fourth ... |
Can Bankruptcy Prevent a Foreclosure? - RealtyBizNews
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The Daily Docket: Bankruptcy Claims Trading Slows - Wall Street Journal (blog)
The Daily Docket: Bankruptcy Claims Trading Slows Wall Street Journal (blog) Dow Jones Newswires reports that Swedish regional air carrier Skyways Express AB and its subsidiary said it's going to file for bankruptcy. The owners of Manhattan's Alex Hotel and Flatotel are filing for bankruptcy, Bloomberg reports. |