Yes, there are alternatives to bankruptcy. It would be convenient for bankruptcy attorneys to forget them, but the goal is to help an individual recover financially—whether through bankruptcy or an alternative to bankruptcy. Your Charlotte bankruptcy lawyer can help you sort through the options.
Credit Counseling
A credit counseling service is one way to manage and recover from debt. Generally, the credit counseling organization takes a once or twice a month payment from you and distributes it to your creditors—after they have negotiated lower rates/payments on your behalf. These programs are typically structured around a course of 36-48 monthly payments.
While you’re in the credit counseling program, creditors will continue to report information which will appear on your credit report, including that the account is in a credit counseling repayment program. Typically, the responsibility for making sure your payments are reflected on your credit card statements falls on you.
Debt Consolidation Loans
With a debt consolidation loan, you are repaying a loan which was given to you to enable you to pay your creditors. The debt consolidation loan company takes on the responsibility of paying your creditors, and you re-pay the loan to the debt consolidation loan company over time.
Often, debt consolidation loans are secured by the home you own. They act as a second mortgage. For individuals who have too much equity in their home (See NC Exemptions article) for a Chapter 7 bankruptcy. If this is the case, this may be an attractive option. Keep in mind though, that a failure to make timely payments will afford the debt consolidation loan company the right to exercise whatever rights to foreclose that you agreed upon when taking out the loan.
Re-thinking Bankruptcy
A qualified North Carolina bankruptcy attorney can help you sort through the options. When compared to repayments of 36-48 months and the idea of granting another mortgage on your home, bankruptcy may be the better option. Specifically, a Chapter 7 bankruptcy quickly eliminates debt and puts you in a much more powerful financial position immediately. The bankruptcy will show on your credit report, yes. It will also dramatically increase your quality of life and ability to manage your existing finances.
If you’d like to discuss your options, I’d be pleased to speak with you. Call any time, at 704.749.7747. Or, quickly tell me why you’re considering bankruptcy or alternatives to bankruptcy in our Get Started Now tab, and I’ll call you with some answers in mind.