Debt Relief Companies » Avoid Bankruptcy

I have approximately $102,000 of unsecured debt, I am approaching 4 months past due, I need help but dont want to have to pay someone 16% for doing it, please help

Scott — Wed, 26 Mar 2008 00:15:19 +0000

Hello, I am sorry to hear about your situation and I wish I had a magic answer for you. Unfortunately, there are no easy (or free) solutions. Without some other source of money your unsecured debt relief options are debt management, debt settlement, or bankruptcy.

If your debt is way beyond any income you have to pay it back, you are most likely looking at only two of the solutions, debt settlement or bankruptcy. The 16% you refer to is a pretty standard fee for a debt settlement company (15% actually) but if they are successful at reducing your debt by, say half, then you still come out way ahead and avoid bankruptcy. Of course there are many factors regarding debt settlement to consider.

Bankrupcy is no longer easy and it does not wipe out your debts immediately like it used to. Now there is a more lengthy process that includes working with a credit counseling company (they offer the debt management programs I referred to earlier).

Research all your options, seek out advice from potential debt relief companies, talk to your lawyer if you have one available to you, and make your decision as to what to do.

The best advice I can give you is: don’t do nothing. The problem will not go away on its own. Thanks for stopping by the site.

what happens to my credit if i file for chapter 13 bankruptcy?

Scott — Tue, 03 Jul 2007 23:45:39 +0000

Filing bankruptcy is very damaging to your credit which will have long lasting effects for many years. As such, bankruptcy really should be a last resort and should be avoided if possible. Even debt settlement, which hurts your credit, does not have the same length of time of lasting damage to your credit score that bankruptcy does.

Typically I would suggest you explore the debt settlement option first and then decide if you still want to pursue bankruptcy. Debt settlement works for most people seeking to avoid bankruptcy so long as:
1. You have some steady income
2. You are able to make consistent (lower) monthly payments that they will suggest to you
3. You are able to stop accumulating new debt
4. Your debt is not secured (by real estate, a car, etc)
5. You do not have problems with student loan debt or tax debt (those require specialists to help you)

Is that you? If so, talk to a few debt settlement companies to see if the solution may work for you since it will be much better (but still not good) for your credit.

Will a debt consolidation office help with a credit card company who is suing?

Scott — Fri, 20 Apr 2007 02:04:15 +0000

If you have already been sued by a credit card company, I think you are best off speaking directly with a lawyer who specializes in debt problems rather than a debt consolidation office. A good bankruptcy lawyer is probably your best bet as a place to start even though you may not need or want to to file for bankruptcy. He/she will understand the procedures and know how to handle your case.

Understand that lawyers who do this type of work often are able to structure their fees in a manner that is not prohibitive in many cases. Do not think that just because it is a lawyer, you cannot afford it. These lawyers specialize in helping people in debt as their career and they typically have adjusted their fee structure to accomodate these situations. It’s worth the call to find out the details for yourself since they often offer free initial consultations.

Best of luck to you.

What’s the Effect of the New Bankruptcy Laws?

Scott — Sun, 18 Feb 2007 18:07:07 +0000

The bankruptcy laws were changed in 2005 in an effort to curtail the number of people who file for bankruptcy as a way to release themselves from the responsibility of their debt. Many people and apparently the government as well thought that it was too easy to file for bankruptcy.

As a result, the process now involves more legal hurdles, time delays, increased paperwork and documentation, and mandatory credit counseling. In short it is no longer easy nor as quick of a process as it was before AND it still has the huge long term negative consequences on your credit worthiness and future financial flexibility.

Now more than ever, bankruptcy really should be a last resort only for the most desperate of situations. If you have any chance to solve your debt problem with debt settlement or debt management then you should explore those routes first.