Chapter 7 Bankruptcy Alternatives
Chapter 7 bankruptcy alternatives include chapter 11 and 13 as well as nonprofit debt consolidation programs, consumer credit counseling and debt consolidation loans.
Chapter 11 Bankruptcy may be the right choice for those in business, such as corporations, partnerships, and sole proprietorship. Under this chapter you can seek adjustment of debts, either by reducing the debt or by extending the time for repayment, or you may even seek a more comprehensive reorganization. Sole proprietorship may also be eligible for relief under chapter 13.
Chapter 13 bankruptcyis for individuals who have regular income and desire (or can afford) to repay their debts. You propose a repayment plan to the court and your creditors for as little as 10 cents on the dollar. Under chapter 13, you will have 36 – 60 months to repay your creditors.
You may also be able to negotiate an out-of-court agreement with creditors either on your own or through non profit debt consolidation programs. In many cases they may provide the best alternatives to filing bankruptcy because they can usually negotiate on your behalf for 10-30 cents on the dollar thus saving you a fortune in interest and late fees.
WARNING! A chapter 7 case may be dismissed for substantial abuse when the debtor has the ability to propose and carry out a workable and meaningful chapter 13 plan.
Debt Danger Signs!
Do you . . .
- Borrow from friends and relatives to cover basic expenses?
- Depend on overtime or moonlighting to cover monthly bills?
- Consolidate debts by borrowing from a high-interest lender?
- Pay only monthly minimums or miss payments on charge accounts?
- Panic when faced with an unexpected expense, such as car repairs?
- Hope that checks you’ve written don’t clear the bank before payday?
- Find it impossible to save money or withdraw money from savings to cover bills?
If you answered yes to one or more of these questions, then like thousands of other Americans you may be considering bankruptcy but this may not be your best solution!
The average American:
- Has over $12,000 (thousand) dollars of unsecured debt;
- Can only afford to make minimum payments; and
- Requires over 23 years to pay off their credit card debt!
If you are faced with a financial hardship arising from extenuating circumstances such as a job layoff, lack of money management skills, overuse of credit cards or just a run of bad luck . . . you’re not alone!
Many people can avoid bankruptcy, stop debt collection actions, and prevent major damage to their credit report by enrolling in a nonprofit debt consolidation or credit counseling program.