Some Alternatives to Bankruptcy
Filing a bankruptcy petition, whether under Chapter 7 or Chapter 13 of the United States Bankruptcy Code, to protect you from your creditors and to give you a little bit of breathing room from your heavy debt load is nothing of which you should be ashamed. If you are like many people you have incurred a vast amount of debt from an unfortunate accident which required medical intervention, from an attempt at building a business, or from other circumstances out of your control.
Salcido Law Firm can assist you through this difficult time by carrying you through the bankruptcy process until you are freed through a bankruptcy discharge.
Are There Alternatives to Bankruptcy?
The simple answer is yes. In addition to the Federal Debt Collection Procedures Act, which is an out-of-court procedure, other options to filing bankruptcy should be thought of so that one may consider the pros and cons. However, most often individuals find that filing for bankruptcy to be the better option. Some of these alternative options include as follows.
- State insolvency. State insolvency actions are simpler than bankruptcy and therefore potentially cheaper and faster. This action requires the cooperation of the creditors and the debtor. Bankruptcy is a more reliable remedy because the federal bankruptcy law can force the creditor and debtor to take their required actions.
- Dissolution of partnership ordered by the court
- Individual miscellaneous remedies. Each states remedy differs.
- Transfers in satisfaction
- Deeds in lieu of foreclosure. When a home owner can no longer make monthly payments on the home, he/she can file for a deed in lieu which allows the home owner to deed his/her property to the lender in exchange for being forgiven the entire amount of the mortgage. The lender is then able to sell the property in order to retrieve as much of the unpaid mortgage as possible.
- Federal provisions for individuals in the military. An example of this would be the Soldiers’ and Sailors’ Civil Relief Act established in 1940. This act holds for a suspension of civil proceedings against those in military service.
- Loan consolidation provisions for federal education loans.
One of the more common alternatives to bankruptcy is to negotiate with each one of your creditors one by one to lower your debt principal or interest. The Utah debt relief attorneys Salcido Law Firm can assist you with renegotiating your debt. This process can often take just as long as the bankruptcy process but the chances that your credit score will be negatively impacted decreases somewhat and you avoid having a bankruptcy show up on your credit score for the next 7 to 10 years.
One of the other alternatives to bankruptcy is debt consolidation, but the problem with debt consolidation is that it is not always successful at reducing the amount of money you actually have to pay or it does not reduce it enough. There are times when debt consolidation will work, but if you have a significant debt load debt consolidation may not be the right option for you.
Contact Us for a Free Consultation
If you would like to go over all of your alternatives to bankruptcy contact us at 801.413.1753 or email us anytime. Our Salt Lake City debt relief lawyers will help you understand whether bankruptcy is the best option for you in a free consultation.