Alternatives to Bankruptcy
Louisville Bankruptcy Alternatives Lawyer
Southern Indiana and Kentucky Short Sale Lawyer
Today, even among sophisticated, educated consumers, there still exists a stigma against filing for bankruptcy. This stigma causes people to seek out alternatives to bankruptcy. The fact is that none of the alternatives are as effective as bankruptcy in helping you get a fresh start from debt.
Richard A. Schwartz, Bankruptcy Attorney, understands how to help people get the most out of their bankruptcy.
The Pros and Cons of Alternatives to Bankruptcy
- Debt settlement companies — While they are sold as preserving your credit, the reality is often something much different. The plans that these type of companies sell try and negotiate a lower debt with your creditors. Often the real outcome of this negotiations is that your credit is further damaged and you have incurred the extra cost of paying for services that didn’t achieve your goals. There may also be negative tax ramifications through these plan that can be avoided by filing bankruptcy. A Chapter 7 bankruptcy can take care of your debts in a much more immediate and assured fashion than working with a debt settlement company.
- Short sale — A short sale can help you avoid foreclosure, just as a Chapter 13 bankruptcy can. It is a sale of your home when the fair market value is less than the amount owed. A short sale must be approved by the bank. The difficulty is that often banks do not approve short sales. Simply getting an answer on whether or not an approval is or isn’t being issued can take six months or more. Most buyers are not inclined, or simply cannot, wait that long to find out if your house is available as a short sale.
- Deed in lieu — A deed in lieu of foreclosure is a transfer of your rights in your home to the bank. It is, essentially, turning in the keys and walking away from your home. The problem with a deed in lieu comes if the bank cannot sell the house for the amount you owe on it. The amount left over is called a deficiency and the bank can sue you to recover the deficiency.
- Negotiating on your own with creditors — Taking the time to negotiate with your creditors and their myriad bureaucracies is not likely to yield sufficient results for the amount of work that goes into it. Banks often request extensive documents and then re-request them later. Months can go by while decisions are being made by the bank. That time adds up and you will still be responsible for all of your debts during that time. Chapter 7 and Chapter 13 bankruptcy both allow you take control of your debt now.
Taking Action on Your Debt Now Is the Key
Many people attempt different methods to try and get out of debt. Perhaps, they try one of the above methods. Perhaps, they try to lead a frugal lifestyle in hopes that they will eventually repay their debt.
The key to real resolution of your debt situation is to take action now. Interest will continue to compound creating ever larger principal amounts. Your creditors may secure wage garnishments. Your stress levels will be difficult to endure.
No matter what decision you make on handling your debt, talk to a bankruptcy attorney. A free initial consultation can be the first step to being fully aware of all of your options.
For help getting out from under debt, in Kentucky call 502-485-9200, in Indiana call 812-945-9200, and toll free in either at 866-366-3328 or simply contact us online to set up your free initial consultation with one of our New Albany or Louisville bankruptcy alternatives attorneys. Evening, weekend and in-home appointments are available for your convenience.