If you have more debt than you feel you can realistically pay off, you might be considering bankruptcy. Bankruptcy is a valid way to have your personal debt discharged, but at a price. When you file for bankruptcy, you either cede control of
your assets to a bank trustee to be liquidated or work with a trustee to repay your debt through a repayment plan, depending on whether you file for Chapter 7 or Chapter 13, respectively. In either case, your credit score suffers for years after you file.
In 2011, 1.37 million Americans filed for bankruptcy. Others used alternate methods to handle their debts, which are discussed below. Before you make any decisions about managing your personal debt, speak with an experienced bankruptcy attorney to ensure you are aware of all your options.
Consider a Consolidation Loan
You might qualify for a consolidation loan, which is a loan that is used to pay off your debts, leaving you with only one larger loan to repay over a two to five year period. This can be a great way to get a handle on your debt if you have multiple small debts.
Consider a Debt Repayment Plan
If you file for Chapter 13 bankruptcy, you work with the court to repay your debt through a repayment plan. But you can also determine a repayment plan without
having to file for bankruptcy by working with a credit counseling agency. Remember to thoroughly investigate a credit counselor before choosing to work with his or her company – there are many scams that prey on indebted individuals under the guise of providing debt help.
Consider Settling Your Debts
You might be able to negotiate with your creditors directly to work out a debt
settlement. Do this by reaching out to them, rather than communicating through the
collection agency they use. You are more likely to reach a favorable settlement if you are proactive about working with your creditor and show that you will uphold your part of the settlement in good faith.
Determine if You are Judgment Proof
If you have no assets that your creditors can legally take, even with a court order to collect your debt, you may be deemed to be “judgment proof.” This means that you literally have nothing other than the basic necessities for living. In this case, it could be in your best interest to simply do nothing about your debt, because there is nothing that can be done to you to recover it.
Work with an Experienced La Crosse Bankruptcy Lawyer
If you are considering bankruptcy, consider all of your options to determine if
another might be more appropriate for you. Bankruptcy is a great tool for reducing excessive debt, but it is not your only option. To learn more about your alternative options to bankruptcy, speak with an experienced bankruptcy lawyer. Contact our team at Moen Sheehan Meyer, Ltd. today to set up your initial consultation in our La Crosse, Wisconsin office.