Theme: A few ideas about some bankruptcy alternatives to think about
October 28, 2009There are times when everything seems hopeless due to bills accumulating. You do not know what to do or where to turn. Not everyone has to declare bankruptcy and not every attorney should automatically advise it. That being written, there are some things that every person needs to know when it comes to bankruptcy alternatives. With recent legislation restricting the use of bankruptcy chapter 7 and chapter 11 bankruptcies not everyone qualifies to have their debts “magically” forgiven. In fact most people can not tell the difference between 7 and 11.
Also keep in mind if you are considering running any sort of business its important to think about the fact that there are cash based home-based businesses that can be positioned to be more profitable than other businesses that secure credit.
The absolute worst thing a person can do is to ignore their responsibilities. That route has a negative affect on everyone and plays a huge factor in rising interest rates. Unfortunately among the most prevalent bankruptcy alternatives this is the one most people elect to pursue. It is not legal and can come back, repeatedly, to harm you and your credit score.
People who specialize in bankruptcy alternatives can attest to how the law being brought into a situation can immediately force a person to take stock in their choices. Secured assets such as homes, cars and material possessions can be repossessed or foreclosed on. Bankruptcy alternatives that include ignoring collection agency phone calls, ignoring summons to court and the like can lead to major trouble.
Specialists in bankruptcy alternatives can advocate one scenario in particular when the “Do Nothing” technique might be the best alternative. Debt collectors do not want people to know that there is a statute of limitations on an attempt to collect a debt through legal recourse. This limitation is different from state to state so research is needed to determine an area’s particular laws.
Once the time limit has passed a debt collection agency can still attempt to collect the debt and it can remain on the credit record but they do not have any legal recourse. The loop hole in this law is that it has to be a continuous amount of time where no payments have been made. For example: a person has a debt on a credit card for five years and eleven months. They have not paid on it in that entire time. A collection agency sends one of their imitation legal letters. The debtor is frightened and sends in a payment of ten dollars. The time limit has now begun again.
Bankruptcy alternatives are out there. It does require taking stock of the situation and addressing the problems. Many credit counseling services are now available to help straighten your finances and get you on the right track towards being financially responsible for your debts. It may not involve heading to bankruptcy court. Many credit card companies are willing to help work with you on debt. It takes time but it is worth the effort.