When times are difficult financially, you may begin to feel a creeping fear that you will need to file for bankruptcy, either personally or for your business. It is important to understand that, while sometimes bankruptcy really is the best option, there are also some alternatives that you should consider first. In today’s blog post, we’re taking a look at four of those alternatives.
Sometimes it is possible to contact your creditors and arrange a payment plan that works for you. Creditors want you to be able to pay your debts because it puts money back in their pockets. If you explain your situation honestly, they will sometimes understand that repayment in full is not an option for you. They may set up a payment plan to allow you to pay the debt in more manageable increments.
Come up with a plan and call your creditor to ask if it’s an option. You may be able to negotiate. If you ask, there is a chance your creditor could waive fees, interest, or even some of the principal in an effort to help you. Believe it or not, it is often the case that if you are able to make a lump-sum payment, creditors may be willing to settle the entire debt for 10 to 50 cents on the dollar.
Debt Consolidation Loan
It may be possible to take out a single loan that will allow you to repay all of your creditors. This is called a debt consolidation loan. This way, you still have the same amount of debt, but it is all gathered into one loan and you only have one loan payment to make instead of multiple.
These are plans that we can help you arrange with your creditors. Normally, this will mean you must deposit a certain amount of money on a monthly basis with a credit counseling service. The amount of the payment would depend on your individual situation and it is more helpful for some than for others.
If you would like to discuss your alternative to bankruptcy with us, we would love to hear from you. At Hedtke Law Group, we are passionate about using our knowledge and skills as attorneys to help our clients navigate complicated financial situations. If you’re struggling or if you have questions you think we may be able to help you with, we encourage you to contact us today!