Are There Alternatives To Bankruptcy?If you are feeling the crunch with gas prices affecting everything we do daily, you may be considering filing bankruptcy. Before you go any further though, maybe you should consider the alternatives to bankruptcy. There plenty of options even within the world of bankruptcy such as chapter thirteen and chapter seven.
Lets take a look at what the bankruptcy terms are first. Chapter seven is often called liquidation bankruptcy and is really the last resort when a person can not pay back any debt at all, but there are restrictions to who can file for this option. If a person has filed in the last six to eight years, or if they do meet the standards for repaying debt in chapter thirteen, then the person won't be allowed to complete chapter seven filings. The person will be required to list all property, current monthly living expenses, current income and income source, and any and all real estate or businesses. The rules for ch 13 filings have changed in the last few years to not only benefit the businesses who lose money when a bankruptcy is filed, but to help the person filing to not make the same mistakes that got them into the situation in the first place. With chapter thirteen , the person must prove tot he court that they have enough income to actually pay back the debt over a three to five year time span. If they don't make enough or if their income is sporadic, then they likely won't be approved. With either option, credit counseling is required both before and after the filing is complete. So, what are the alternatives to bankruptcy? If you don't want to have the bankruptcy on your record for the next ten years, then try to find a reputable credit counseling service. Some are qualified through the government to work with those considering bankruptcy and this might be the best place to look. These agencies should help you understand what your debt really is, help you develop a plan to manage it without making it larger, and often offer workshops and tools to help you learn all this. Other alternatives to bankruptcy are debt management plans. Only consider this after speaking with a certified credit counselor. You and the counselor will work out a plan where you deposit money to an account and the counselor or agency will then disperse the money to pay off your debts every month. You will have to do some homework to make sure that your debtors will work with you on this option. When you use a debt management plan, many companies will actually wave fees or interest if you work with a qualified debt mangement agency agency. |