Bankruptcy Alternatives

There are several possible alternatives to bankruptcy for those in financial trouble. It is important that when debtors consider these options they investigate the organizations they are dealing and make sure they do not do anything that places them in a worse situation. Some bankruptcy alternatives might have an impact on a subsequent bankruptcy filing if the alternative route does not work.

The main alternatives are out-of-court settlement with creditors, debt counseling services, and debt consolidation loans.

Out-of-Court Settlement Rather than file bankruptcy, one may attempt to consider settling your unsecured debt at a reduced amount. It is unlikely that an individual could do this independently but there are companies that will help you negotiate with your creditors. Is is important that these negotiations are handled properly and the consumer should seek professional help. As in all these actions there can be a negative effect on one's credit rating.

Debt Counseling Service Debt counseling services can be a start in helping you deal with your financial difficulty. They try to consolidate your monthly payments and obtain payment or interest reductions on your unsecured debts. The only problem with debt counseling is that many people are in such financial trouble that they will not qualify for debt counseling because they will not be able to repay their debt even under the better terms.

Debt Consolidation Loans Another option is borrowing against the equity in one's home to pay down credit card debt. This of course requires home equity and a careful consideration to make sure you are not putting yourself in a worse position. Not being able to pay your home equity loan could leave you in a worse position than not being able to pay your credit card debts.

Beware of Refinancing

If you have equity in your home, you can file a Chapter 13, protect your equity, and repay your mortgage arrears over time. Refinancing or taking out a second mortgage may just create an additional mortgage payment that you cannot afford. You should explore all your options and make sure you contact Rauser and Associates along the way so we may advise you of your legal rights. Please remember we offer a Free consultation.

A Rauser and Associates attorney is available to discuss all your options with you. Please call 1-888-843-5787.