Filing for bankruptcy is the best remedy for many debt problems. However, there are other strategic reasons why a borrower may want to avoid bankruptcy. Consider:
An experienced attorney will have a better sense of the proper course of action in a given situation than the average person would. For example, many people file bankruptcy just to get their creditors off of the back. However, laws have been passed to stop excessive harassment from bill collectors – a good lawyer can help get you protection from aggressive creditors.
Another option is to negotiate with your creditors. Creditors do not want you filing for bankruptcy, since they would then lose any control over the situation. As a result, many creditors are willing to settle your debts for less than you owe to help you avoid bankruptcy.
If a borrower is faced with foreclosure, the borrower can refinance the mortgage. Borrowers can negotiate for a lower monthly mortgage in exchange for a longer payment period. Also, it may be in your best interests to simply do nothing. If you do not have any assets to speak of, you are "judgment proof."
Note that creditors will not be able to collect anything from you, since you do not have anything that they can legally take (there are laws which exempt certain possessions from being seized). This can save you the time and expense of filing for bankruptcy.
Many borrowers choose to not go to bankruptcy court even though bankruptcy is clearly the best remedy because the borrower is ashamed of declaring bankruptcy. Although there are many valid reasons to avoid bankruptcy court, shame and pride should not be the primary reason. The point of bankruptcy is to give the borrower a second chance; borrowers should not be afraid to ask for that chance if they truly need it.
If you believe you may need to file for bankruptcy, you should speak with an experienced bankruptcy attorney. An attorney will help you understand your options and will offer advice for whether or not you should file for bankruptcy.
Last Modified: 02-18-2015 12:48 PM PSTLaw Library Disclaimer
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