There are six different chapters of bankruptcy, and not all of them apply to everyone. If you feel cornered financially speaking, bankruptcy may be the first solution you think of to resolve your personal or business problems. However, it does not have to be your solution. A bankruptcy law firm can help you in other ways besides filing for bankruptcy. The following options are available to you.
Debt consolidation requires that all of your creditors agree to allow you to pay them less but make a regular monthly payment. This may be done through your lawyer so that you pay the lawyer the monthly lump sum, and the lawyer disburses these payments to your creditors. It can also be just a legal arrangement on paper that your lawyer sets up with your creditors, and then you pay the creditors according to the legal document. Either way, you avoid bankruptcy, improve your credit, and pay off your debt.
Elimination of Interest Accrual
Another option your lawyer can negotiate is the elimination of the accrual of interest on all of your debt, with the exception of your mortgage, school loans, and car loan. The lawyer speaks to all of your creditors, including credit card companies and personal loan companies, and asks them to stop charging interest and late fees for a specific period of time. It may also be possible to completely suspend interest charges; some creditors are willing to do that just to get the money that is owed them. Every creditor that agrees to this is named in a legal document drawn up by your lawyer and signed by all of the creditors taking part. Once that is complete, they cannot call you, harass you, or threaten to sue you for more money, so long as you make payments on the debts owed.
Excusing Debt Due to Disability
If you have become disabled, your disability benefits may still be garnished by creditors because your benefits count as income. As a customer with a disability, you cannot work, and garnishing your benefits makes your situation worse, not better. Your lawyer can formally request that all of your debts be suspended indefinitely, or until you are able to pay your creditors. If your disability is only expected to last a short while, your lawyer can ask these companies to suspend their collection of the debts until up to a year after the disability is expected to end and you have returned to work.
For more information about your options, contact a local bankruptcy law firm.