Alternatives to Bankruptcy

ALTERNATIVES TO BANKRUPTCYWhat are some alternatives to filing bankruptcy, asks John W of Clearwater, Florida.  The bankruptcy attorneys and counselors at Weller Legal Group are experienced and knowledgeable in not only bankruptcy law and its procedures, but additionally in the numerous alternatives to bankruptcy.

Our law offices offer many alternatives to bankruptcy.  Credit card debt and other unsecured debt obligations are common to the clients who approach our offices.  One alternative to bankruptcy is debt settlement.  There are many debt settlement companies that the reader probably has seen advertised on television and other mediums.  The problem with many of these debt settlement companies is evident to the many clients who enter our offices with stories replete with the difficulties they encountered with such companies.

First, many of these debt settlement companies operate in a fraudulent manner.  Second, even if the company operates with the intention of actually helping its customers, the manner or procedure in which they settle debt often creates problems for the very persons they seek to assist.

Typically, these debt settlement companies will request a monthly payment from their customers.  They promise that when sufficient funds are acquired through such a monthly payment, the debt settlement company will then begin the process of offering a settlement to the unsecured creditor.  The problem is that the monthly payment generally required of their customer is an amount that requires the customer to pay for many months and sometimes, years.  By the time enough funds are accrued by the debt settlement company, the client is often facing actual litigation and lawsuits by his or her creditors.  Once an unsecured obligation, such as a credit card enters the realm of a lawsuit, such litigation usually precludes any meaningful settlement.  The attorney representing the plaintiff is hired to prosecute a lawsuit and obtain a judgment against the defendant.  Such attorney is not particularly interested in a settlement with the defendant.

When such litigation ensues, typically the debt settlement company will sever its relationship with the customer.  The debt settlement company is not equipped to represent such customer in any form of litigation.  The debt settlement company is not an attorney.  Furthermore, the debt settlement understands the basic view of the plaintiff attorney mentioned in the prior paragraph.

When such relationship is severed by the debt settlement company, it is common for such company to retain most or all of the monies its customer tender for the settlement of his or her debts.

The proper manner to settle any unsecured debts is for the debtor to tender approximately 40% to 60% of the total balances owed on such debts within four to six months of the original delinquency on such debts.   For example, if the debtor owes $20,000 on his or her credit cards, and wishes to settle such debts, the debtor will need at least $8,000 to $12,000, within four to six months of the original delinquency in order to achieve a successful debt settlement.  If the debtor will not have such funds or the means to acquire such funds, within the prescribed period, a successful debt settlement will likely not ensue.  In such an instance, the debtor should seek other alternatives to addressing his or her unsecured debt obligations.  Soliciting the services of a debt settlement company will probably lead to an unsatisfactory result.

The inability of the debtor achieves such a settlement does not make him or her a failure or lesser.  It is merely a condition of the particular debtor.  Such debt alternatives are merely tools to address debts.  One does not use a hammer to cut wood or a saw to pound nails.

Another bankruptcy alternative is credit repair.  Some debts may exist beyond the statute of limitations, meaning the debtor’s creditors are not in the position to successfully sue the debtor.  Other debts may be such that they may be removed from the debtor’s credit report, or otherwise improved through the process of credit repair.  Some debts may appear on the credit report in duplicate and can be removed.  There are many aspects to credit repair.  One can dedicate a lifetime of effort to the subject of credit repair alone.  A proper approach to the repair of one’s credit can sometimes achieve tremendous results.

Another alternative to bankruptcy is foreclosure defense.  Our law office was one of the first in the State of Florida to provide representation on the subject of foreclosure defense.  As in the case of debt settlements, there is a wrong and correct way to represent persons in foreclosure defense.

Most foreclosures that are filed against homeowners contain certain deficiencies, such as procedural issues or incorrect documentation.  Additionally, many homeowners may have certain defenses that may be raised against the bank or lender.  Predatory lending, improper bank practices, and other issues may be present.

While our office litigates these issues, we also generally will attempt to come to terms with the lender through a device called a loan modification.  The lender may decide to abandon the prosecution of the foreclosure and agree to certain terms with the borrower, such as a waiver of arrearages, reduction of interest rates and monthly payments, and sometimes, a principle reduction.  Additionally, adjustable rate mortgages can sometimes be reconstructed into a fix rate mortgage.

These are just a few of the bankruptcy alternatives offered by our law firm.  If you are considering either bankruptcy or an alternative to bankruptcy, our bankruptcy attorneys and counselors are here to assist you.  Weller Legal Group, PA is the oldest remaining law firm in the Tampa Bay area with multiple offices, primarily dedicated to helping those confronted with debt.  We have offices in Clearwater, Port Richey, Brandon, and Lakeland, Florida, which are all conveniently located to assist our clients.

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