If your debt is overwhelming and you cannot imagine paying it off without putting at risk your ability to pay for your living expenses (even pared down), then you have probably considered bankruptcy. But for many people, including business owners, bankruptcy may not be the only option or the best option.
Bankruptcy may be the best option if your assets are quite depleted and you have multiple untenable delinquent accounts. But bankruptcy may not be for everybody, especially those whose jobs are at risk if they file bankruptcy (especially jobs in the financial sector).
In certain instances, debt settlement (sometimes known as credit workout) may be preferable to bankruptcy.
Debt settlement with attorney representation allows you to focus on a few accounts that are delinquent and are unlikely to be paid off by you in the near future.
For many people, debt settlement can often be a more targeted tool than traditional bankruptcy proceedings. Debt settlement allows your attorney to work with your creditors to accomplish the following outcomes:
- Reduce your current debt
- Lower or possibly even eliminate the interest rate on your current debts
- Lower or eliminate late payment fees and penalties
We tell our clients that they cannot accomplish these debt settlement tasks without the benefit of counsel. For creditors, a debt settlement means that they will eventually receive a larger portion of your accrued debt within a shorter time frame than if a bankruptcy were to be filed. This means that negotiating with your attorney will assure them (the creditor) a better and bigger payoff, sooner, so they are often quite ready to “deal” with your attorney.
Click here for our instructive video about this alternative to bankruptcy.