Financial Advice - Bankruptcy and Alternatives to Bankruptcy
Often times when you contact a bankruptcy attorney for financial advice, the first response is to recommend filing without learning the specifics of your unique situation. Bankruptcy is not right for everyone, especially when there are more reasonable approaches that may be better suited for you. When you contact the Law office of Matthew C. Swanson we will give you an open and honest assessment of your situation. If we does not think bankruptcy is appropriate, we will help you explore other debt relief remedies. Here are some possible alternatives to bankruptcy that would be explored:
Debt Settlement
Creditors understand that bankruptcy is an option for those with excessive debt. Many creditors are willing to negotiate a settlement so that they receive a portion of their money, instead of risking losing everything in a bankruptcy. Debt settlement may not be a viable option for many due to the requirement that you generally need the money upfront to negotiate. It is one thing to convince a creditor to settle for 40% on a $25,000.00 credit card, it is another to be able to come up with the $10,000.00 in a short time period. There are also tax ramifications for the forgiveness of debt. It would be wise to speak to a certified public accountant before proceeding with any debt settlement.
Loan Modification
If your only financial trouble is your mortgage delinquency, you may not want to walk away from your home just yet. A loan modification may allow you to stay in the home under more reasonable terms (interest reduction, term reduction, principle reduction). The Home Affordable Modification Program (HAMP) or similar programs may be a more viable option for you.
Short Sale/Deed in Lieu of Foreclosure
If you are facing foreclosure, you may want to contact your lender about accepting a Deed in Lieu of Foreclosure or a short sale. In either situation, you would surrender the home to the lender and eliminate your liability. It would be wise to speak to a certified public accountant to discuss and potential tax ramifications for a Short Sale or Deed in Lieu of Foreclosure.
Debt Consolidation
Debt consolidation typically involves borrowing money from one lender at a reduced interest rate to repay a number of other lenders at a higher interest rate. By consolidating the debt, the debtor would make one monthly payment to one creditor and would, ideally, pay off the debts in a shorter amount of time. Be weary of some companies that practice debt consolidation. You may be spending a disproportionate amount of the monthly payment on what they deem as their monthly fees. This is a clear reason to get professional financial advice before signing up for any such service.
Consider Your Options Carefully
It is important to be careful when considering bankruptcy or alternatives to bankruptcy. You need to have realistic expectations and you need to be provided with realistic solutions. Fully research any company you decide to work with. Be sure that you are equipped with all the information concerning the advantages and disadvantages of bankruptcy.
Let Matthew C. Swanson, PC Help You Today
If you are contemplating bankruptcy or alternatives to bankruptcy, you can’t afford to pass up a free consultation with an experienced attorney. Contact Matthew C. Swanson, PC today.
Matthew C. Swanson, PC services all of Plymouth County, Bristol County, Norfolk County, and Barnstable County.