We received many questions from our New York and New Jersey bankruptcy clients over this: Should I go with a debt relief agency or file a Chapter 7? Even though bankruptcy attorneys will be quick to suggest filing a Chapter 7, our approach is different. We advise everyone that bankruptcy must be a last solution, after all other remeides are exhausted.
For example, a negotiated debt-settlement is one functional alternative to bankruptcy. In a debt settlement, an organization contacts creditors to arrange a plan to minimize monthly payments. In addition, a good settlement organization will minimize total debt as well as interest payments.
However, one must be careful in choosing a debt-settlement company, as there are many companies claiming to negotiate your debt, but will take your money and perform minimal services. That said, debt comanies do provide leverage as the emotional nature of this type of negotiation makes it very difficult to talk to a risk manager
Should our clients want to proceed with negotiating themeslves, we need to arm them. For example, to even consider debt settlement one needs to have access to a lump sum of cash to make a down payment. They need to have to patience to deal with harassing phone calls and letters and be prepared to commit to at least several years of monthly payments at a high interest rate. But if debt settlement is the way to go and bankruptcy is not an option, you may be able to save your credit score and avoid Chapter 7.We received many questions from our New York and New Jersey bankruptcy clients over this: Should I go with a debt relief agency or file a Chapter 7? Even though bankruptcy attorneys will be quick to suggest filing a Chapter 7, our approach is different. We advise everyone that bankruptcy must be a last solution, after all other remeides are exhausted.
For example, a negotiated debt-settlement is one functional alternative to bankruptcy. In a debt settlement, an organization contacts creditors to arrange a plan to minimize monthly payments. In addition, a good settlement organization will minimize total debt as well as interest payments.
However, one must be careful in choosing a debt-settlement company, as there are many companies claiming to negotiate your debt, but will take your money and perform minimal services. That said, debt comanies do provide leverage as the emotional nature of this type of negotiation makes it very difficult to talk to a risk manager
Should our clients want to proceed with negotiating themeslves, we need to arm them. For example, to even consider debt settlement one needs to have access to a lump sum of cash to make a down payment. They need to have to patience to deal with harassing phone calls and letters and be prepared to commit to at least several years of monthly payments at a high interest rate. But if debt settlement is the way to go and bankruptcy is not an option, you may be able to save your credit score and avoid Chapter 7.