If you’re facing serious financial problems, you may be considering filing for bankruptcy. In many cases, bankruptcies were an apt solution for people who have been struggling financially. While filing bankruptcy is often the last resort for debtors, it’s also possible that they may not realize what alternatives there are. Indeed, there are less drastic courses for bankrupt debtors to get rid of their debts than to file for bankruptcy.
Stop Harassment
It really depends on what your main motivation is for filing a bankruptcy petition. If you’re just after bankruptcy protection in the automatic stay to stop debt collection harassment, you can get some relief from over-zealous creditors or collection agencies by exploring the provisions of the Fair Debt Collection Practices Act.
Reorganization outside Bankruptcy Court
If you feel that, as a debtor, you have enough income and property you can liquidate to use for debt payments, you can then arrange a repayment plan with your creditors that will allow you to pay off debts in installments and perhaps even negotiate to pare down your debt amount to something more manageable. This alternative might actually be more appealing to a creditor who will likely not be able to collect if you file bankruptcy under Chapter 7 (liquidation), which will likely render all or most of your assets exempt. If you can convince your creditors that you do have the means to pay over a certain period of time or a reasonably smaller amount, this is an easier course than going through the bankruptcy process.
Help from a Credit Counselor
If you wish not to face your creditors or debt collectors by yourself, you can approach a credit or debt counseling agency. Credit counselors can help debtors fix their finances without engaging in bankruptcy proceedings. In any case, if you do end up deciding to declare bankruptcy, you would still need their services since you’d be required to finish a credit counseling course before filing. You can check out Oregon’s list of agencies that have been approved by the US Trustee. Not all agencies that advertise credit or debt counseling services are legitimate. Make sure you do your due diligence.
How can a credit or debt counseling agency help you? It can develop a debt management plan similar to the repayment plan you would have to create in a Chapter 13 bankruptcy case. The main advantage of taking this course is that you get to avoid having a personal bankruptcy in your credit report, which means that your credit score won’t take the hit it would if you filed for bankruptcy. Going this route, of course, means that you won’t enjoy the protection that a bankruptcy filing provides. This means that you’ll likely have to fully pay back the amount of money you owe, and you won’t be accorded the same flexibility that Chapter 13 filers get when they miss a payment.
Judgment Proof
If you’re at a point in life where you have no means at all to pay your debts, your creditors cannot collect even if they get a judgment against you. The law ensures that you are allowed to meet the basic necessities of life so your creditors can’t take away what little you have to live on. You probably won’t be jailed for an unpaid debt, unless it involves taxes or child support. As soon as you do get enough income or assets from which your creditors can collect, any judgment against you will be enforced and you have to start paying.
Looking for Debt Solutions? Consult an Oregon Bankruptcy Attorney Today!
If your owed debts have become overwhelming to the point that you’re considering bankruptcy, the best step to take is to talk to a bankruptcy lawyer. People who want to get out of debt can have their cases reviewed by bankruptcy lawyers so they can be advised on the most fitting debt settlement solution. Bankruptcy filings entail time, effort, and money. While the bankruptcy discharge and protection are distinct benefits, they also come with stigma and a mark on your credit record.
Find out whether declaring bankruptcy or an alternative solution is the right move for you. Call us at Northwest Debt Relief Law Firm to speak with one of our experienced Oregon bankruptcy attorneys.
