Welcome to Bankruptcy Guide
About Bankruptcy Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
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.
About Bankruptcy Specific links
About Bankruptcy News
Bankruptcy Judge slams Credit Suisse's 'greedy antics'
BILLINGS, Montana: A federal bankruptcy judge said he would not reward the "greedy antics" of financial giant Credit Suisse by ordering the repayment of a $229 million loan it arranged for Montana's exclusive Yellowstone Club.
Read more...Bankruptcy judge gives final approval to Circuit City liquidation plan
A federal bankruptcy judge this morning approved a final liquidation plan that will begin the process to get Circuit City's creditors paid. The plan is expected to go into effect by the end of the month. Once the plan goes into effect, a trustee will be put into place who ...
Read more...Judge OKs 2 deals in Hecker bankruptcy
U.S. Bankruptcy Judge Robert Kressel approved two settlement agreements Wednesday in Minneapolis that could reap millions of dollars for Denny Hecker's bankruptcy estate.
Read more...Quigley, Truvo, Credit Suisse, Capmark Financial, Circuit City: Bankruptcy
Pfizer Inc. ’s Quigley unit, a former asbestos maker, was denied permission to exit bankruptcy by a judge who found the world’s largest drug company manipulated the bankruptcy process to benefit itself.
Read more...Judge: Bankruptcy doesn't erase award in teen's killing
Jay Levin shot Mark Drewes in 2003 after the teen played a front-door prank Jay Levin cannot escape a $750,000 court-ordered judgment for fatally shooting a suburban Boca Raton teenager in 2003, a U.S. Bankruptcy Court judge has ruled.
Read more...