I Cannot Get a Handle on my Debt. Is Bankruptcy my Only Option?

Probably not.  In many cases, individuals with significant levels of personal debt have multiple options for taking control of their debt.  Although bankruptcy is often one of these options, it usually is not the only option and in some cases, it is not the best option.

Below are a few alternate options to bankruptcy to consider.  Each has its pros and cons and depending on the details of your case, bankruptcy could be the right choice for you.  To make this determination, speak with an experienced bankruptcy lawyer.

Consider Settling your Debts with your Creditors

Depending on your credit history and the amount of money you owe, you might be able to settle your debt with your creditors without having to pay off the full amount.  This will require aid from your lawyer, who will negotiate with your creditors on your behalf.  Your settlement could be the forgiveness of some of your debt in exchange for the upfront payment of a substantial percentage of it or it could be a grace period now with the requirement that you pay off all your debts later.

Consolidating your Debt Could Make it Easier to Manage

You might qualify for a debt consolidation loan, which is a loan that covers all your debts, leaving you with only it to pay off.  By having only one payment to make, rather than multiple payments, it can be easier for you to track your progress and get out of debt.

You Might be a Candidate for a Debt Management Plan

You might be able to work with a credit counseling agency to develop a debt management plan, which is a budget and payment plan that allows you to pay off your debt without having to file for bankruptcy.  If you are considering this option, work with your lawyer to ensure that your chosen credit counseling agency is legitimate; there are numerous scams that prey on indebted individuals under the guise of providing help.

You Could be Judgment Proof

You could also fall into a category known as “judgment proof.”  Individuals who are deemed to be judgment proof are individuals who have so few assets that if a creditor were to obtain a court judgment to collect the individual’s debt, there would be nothing the creditor could legally take. You cannot be jailed for failing to pay most debts (a notable exception is a failure to pay child support) and creditors cannot legally take your basic necessities, such as your basic clothing, unemployment or Social Security income, and necessary household goods.  Florida allows individuals to retain certain property, such as a homestead or a retirement plan.  You may retain these and still be judgment proof.

Work with an Orlando Bankruptcy Lawyer

If you are facing a substantial amount of personal debt and you are not sure if bankruptcy is the right choice for you, speak with an experienced Orlando bankruptcy lawyer.  Contact Goodblatt · Leo today to schedule your initial consultation in our office.  We are here to answer your questions and help you make productive choices about managing your debt that will help you move toward a financially independent future.

Resource:

ncsl.org/research/human-services/criminal-nonsupport-and-child-support.aspx