Bankruptcy Alternatives

What are Alternatives to Bankruptcy?  
A few of the alternatives to bankruptcy are:

bankruptcy alternatives relief chapter 7

1.  Pay the Debt in Full.  In some situations, individuals may have the financial resources to pay off their debt in full without incurring a major set back or financial hardship.   Yet, in other situations filing bankruptcy may be the best alternative to resolving outstanding debt.  An example might be a family that has their car paid off, but selling the car to pay their debt would place them in a greater financial hardship as they would be without transportation to get to work, school, shopping, the doctor, or other places.  Another example, may be a couple facing retirement and the liquidation of their 401K or IRA would leave them without the resources to support themselves when retired and would cause them to incur taxes and penalties.  Bankruptcy allows individuals to protect assets such as family cars, retirement accounts and other assets.

2.  Credit Counseling.   In some cases, individuals can deal with their debt but need assistance for techniques and tips to stop incurring new debt and to prepare a budget to work out payments on their debt. 

3.  Debt Settlement.  Debt settlement is a method of negotiating with your creditor towards an amicable solution that is designed to resolve the outstanding debt for an amount less than what is currently owed and saves the creditor the future effort, time, and cost to continue to try to collect on the outstanding debt.  In some cases individuals may be able to avoid bankruptcy by the following types of debt settlement.  The drawback to debt settlements is:  1.) It can be a long process.  2.) Unpredicatable with no guarantee of settlement and possible lawsuit for deliquency.  3.) Negative impact on credit report.  4.) Tax consequences (1099-C) on the forgiven portion of the debt.

If the options above don't fit your needs then, banrkuptcy relief may be your best solution.

bankruptcy relief chapter 7

Discover the benefits of bankruptcy protection.

If you have exhausted your other alternatives to resolving your outstanding debt, then bankruptcy protection may be your answer.  Bankruptcy in many cases is the fastest and most effective way to resolve outstanding debt and to get a fresh start.   Contact our office for a free case review.  In many cases, after individuals have reviewed their non-bankruptcy alternatives they find that filing bankruptcy is the most effective means to resolve their outstanding debt.   Some of the benefits of filing bankruptcy include:

  • Low Cost! 
  • Short time frame!  Typically a chapter 7 bankruptcy is completed in about 3 1/2 months.
  • No tax consequences!  Debt that is discharged or forgiven in bankruptcy is not taxed like debt that is settled or written off by creditors (see IRS Publication 4681)

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Disclaimer: Other alternatives may be available, the examples above are illustrative and you should consult with an attorney, CPA and/or financial regarding your unique situation for more information.

Attorney Advertising.  The information on this website is not intended as legal advice, does not imply an attorney client relationship, and you should consult with a professional or attorney regarding the details of your own personal facts and financial situation. Further the information is not warranted to be complete, accurate, or current.