Bankruptcy

Consider Non Bankruptcy Alternatives For Debts

By Susanne Robicsek, North Carolina Bankruptcy Attorn

If you are considering bankruptcy, mortgage modification, debt relief, debt settlement, debt management (credit counseling) or debt consolidation, you should look at all of them to be sure you are making the right decision for you and that you have all the facts. 

If you are in financial trouble there are many different options to consider but many people miss the opportunity because they don’t have all the facts or they try the wrong solution first.

If you were buying a house or a car, you would compare several different models before you buy.  You wouldn’t buy the first one that you saw advertised, would you?  No!  This is a big decision and one that could cause you harm if you made the wrong decision to begin with.  It is the same with financial problems.  Making the wrong decision can potentially cost you time, money, assets and stress.

Filing for bankruptcy should not be the first thing you try and it isn’t the right option for everyone, but consulting an attorney doesn’t mean you will file.   When a client comes in for a consultation with me, I go over any options that I feel could help them, including alternatives for dealing with debts.   Seeing a lawyer means that you can get the facts about all your legal options since only a lawyer can discuss legal options and any good attorney will also answer your questions about your alternatives or avoiding bankruptcy.

I have said this before, but it bears repeating:  considering bankruptcy should not be the last resort, with the important word being “considering”.  People wait way to long before they actually speak to a lawyer for the first time.

I have met with many clients who thought that they are working with a lawyer, or with a company where an attorney was overseeing their case.  In reality no attorney was involved and in many cases, the actions taken by the company made the situation worse since clients were calling me after learning that lawsuits had been filed against them, or even well after judgments had already been taken.

When you see a company for mortgage modifiation, debt settlement, credit counseling or consolidation, they normally just discuss how their particular program works for you.  Even if the company has the words like law, legal, legal group or such in their name, unless the company has an attorney licensed in your state, they are not allowed to discuss your legal options  with you.  I have seen disclaimers and contracts which state that no attorneys are involved, but nonetheless, clients are lead to believe that they are being looked after … until they find out that the suit is served, judgment entered, or foreclosure looming.

I think two worst scenarios I see are where someone has paid thousands of dollars into a payment program that was doomed to fail and they still have to declare bankruptcy, or where someone works on mortgage modification so long that either they get so far behind even bankruptcy can’t help them or they find out on the eve of foreclosure (or after it occurred) that the modification isn’t going to happen.

See also:

Debt Settlement Companies Come Under Increasing Scrutiny from Regulators by Jonathan Ginsberg, Atlanta Bankruptcy Attorney

Considering Debt Settlement? Perhaps Bankruptcy Is Cheaper And More Efficient by Adrian Lapas, Eastern North Carolina Bankruptcy Attorney

No Modification For You !  by Carmen Dellutri, Southwest Florida Bankruptcy Attorney

Does Working On A Mortgage Modification Stop Foreclosure? by Susanne Robicsek, North Carolina Bankruptcy Attorney

Can Bankruptcy Help Save Your Home From Foreclosure? by Susanne Robicsek, North Carolina Bankruptcy Attorney

Are ?Debt Management? Programs a Scam? by Brett Weiss, Maryland Bankruptcy Attorney

Many People Keep Their Homes When They File For Bankruptcy by Susanne Robicsek, Charlotte NC Bankruptcy Lawyer

Full post as published by Bankruptcy Law Network on August 24, 2010 (boomark / email).