People across the country are facing some unprecedented financial challenges and a severely depressed job market. In today’s economy, more and more people find themselves saddled with large amounts of debt. These can include credit card debt, your home mortgage, or past-due student loans. a way to get over some of your debts is to file bankruptcy in your state.
However, there are alternatives to bankruptcy that can help you protect your credit score.. For advice on bankruptcy and your alternatives, you may want to consult an experienced bankruptcy attorney.
Alternatives to filing bankruptcy
Generally, the main alternatives to filing for bankruptcy involve negotiations with your creditors. These options may include refinancing your mortgage or structuring monthly payments through a credit counseling service. Regardless of how you choose to avoid bankruptcy, you should always be aware of your options under your state’s bankruptcy laws, which a skilled bankruptcy attorney will be happy to explain.
Some of the alternatives to filing for bankruptcy include:
- Deed-in-Lieu of Foreclosure
- Overdue mortgage repayment
- negotiate a debt
- Consult with a reputable nonprofit credit counseling agency
Beware of some bankruptcy alternatives
There are some companies that will send mailers to people who have pending foreclosures. Claiming to offer “mortgage assistance,” these companies promise to stop your foreclosure and help you avoid filing for bankruptcy. However, in most cases these companies will require an immediate payment in exchange for your promise to obtain another mortgage to pay off your existing loan.
These companies may also promise to negotiate with your lender and stop the foreclosure altogether. The down payment for this service can be as much as two months’ mortgage payments. However, these companies are notorious for breaking their promises and leaving homeowners in worse financial situations than before contact.
There are other companies with creative ways to take advantage of your situation. The best thing to do if you need professional help is to call a bankruptcy attorney.