Alternatives to Bankruptcy
Bankruptcy is a scary word. It has ugly connotations, and it can be a terrifying concept to embrace. If you've never looked at bankruptcy in the face, you may think it's something for people who have hit rock bottom and have no way out. Someone who's never experienced hard times may even think that those declaring bankruptcy are trying to cheat the system by skipping out on their bills and are looking for an easy way out.
If you're considering bankruptcy, you know nothing could be farther from the truth. You're hardly laughing all the way to the Bankruptcy Court. You've probably been harassed continually by creditors, day and night, by phone, mail or even at your front door. Maybe you've stared at the caller ID as the phone rings, wondering if the number is a potential employer or just another bill collector calling to threaten you. You know that people don't just fall on hard times from being irresponsible. Two out of three Americans filing for bankruptcy have lost a job, and half have had serious health problems.
Regardless of the truth, you might still be worried about what bankruptcy might mean for you. Maybe you're worried because it's a court proceeding, and you are imagining terrifying images of going before a judge. Maybe you've heard that bankruptcy will ruin your credit. You might only consider a bankruptcy as your very last option, and wonder what else you can do.
Cincinnati Alternatives to Bankruptcy
The Northern Kentucky and Southern Ohio attorneys at Steiden Law Offices know the ins and outs of bankruptcy, and we don't necessarily believe you should consider it your absolute last option. However, we care about our clients. We consider it part of our job to educate them on what bankruptcy will mean for them, both the positive and the negative. We don't sugarcoat — if you choose to file for bankruptcy, it will be difficult and stressful, and you might lose assets in the end. We want our clients to know what they're getting into before they file, and know what their options are.
Our attorneys understand bankruptcy, and we understand the people filing for bankruptcy. We've handled more than 6,000 bankruptcy cases in more than 25 years. Call (855) 741-3328 or send an online message to set up a risk-free consultation.
We are proud to serve the Greater Cincinnati area and all of South Ohio with our two Cincinnati offices. We can also serve North Kentucky, including Kenton and Boone County, with offices in Covington and Florence.
What Can I Do Other Than File for Bankruptcy?
Do Nothing: Could it get any worse than it is now? It's always an option to not change your situation at all. You can continue not picking up the phone and not answering the door, and continue throwing delinquency notices in the trash. You may have heard that debts must be deleted from your credit report in seven years. Filing for bankruptcy will damage your credit, anyway. You can simply avoid seeking loans or finding new housing until things get better. And there's always the chance that your creditors will simply decide it's not worth the effort and give up.
The reality is that your debts have likely been sold to a collection agency, whose sole job and sole source of income is to collect from you, and they're not likely to stop. It is true that debts should be deleted from your credit report after a certain amount of time, but there are exceptions and loopholes to that and you may wait years for a debt to disappear only to learn it will hang on for even longer. And if you think your situation couldn't get worse, you may be surprised what curveballs life has for you. Your rent could be raised so you're forced to look for a new apartment or you may need a new car and a loan is the only option. You'll have a much tougher time with very poor credit, and while a bankruptcy does hurt your credit, being someone who does not address their obligations can be worse. Filing for bankruptcy could discharge your debts, putting a final end to them.
Legal Protections to Stop Harassment: Debt collectors can cross the line and enter into activity that is simply harassment. Thanks to the Fair Debt Collection Practices Act (FDCPA), many of those actions are simply illegal. The FDCPA, originally passed in 1978, provides protections to people against harassing creditors, making it illegal for creditors to call other than certain hours, to lie about the amount of your debt, to threaten unjustified arrest or legal action, to use abusive or profane language, or to communicate with third parties about your debt, other than your spouse or attorney. It also provides that creditors, with some exceptions, must cease all communications other than one piece of mail after written notice that you want no further communication or will not pay the debt.
The FDCPA is there to protect consumers. Creditors or bill collectors who do not follow the law are subject to legal action. You are able, under the FDCPA, to put a stop to harassment. The trouble is, while you may no longer hear about your debt, it's still there. Unlike filing bankruptcy, stopping harassment cannot discharge your debts.
Negotiating With Your Creditors: Your creditors want their money, and they want all of it, plus any interest. However, many creditors and even debt collectors understand that you are simply unable to come up with the funds, and if you could, you would have paid them and have this debt off your record. Many of them are willing to take a lower final amount. Negotiating with your creditors to lower your payments or making an offer for a lower amount may bring your debt to a manageable number.
Negotiating your debt down may be the best option for you. There are some risks: Your creditors don't have to negotiate, and they could also negotiate in bad faith and leave themselves a loophole for further collection efforts, unlike discharging debts under bankruptcy, when they would be under court order.
Under bankruptcy, there are certain assets that may be exempt from consideration, like your home and car. If you sell those to pay off your creditors instead of simply having the debts discharged with a bankruptcy filing, you run the risk you may be selling assets that could help you get back on your feet.
Consolidating Your Loans: Many of your debts, especially credit card debt, may have an unreasonably high-interest rate, a factor that could make eliminating them an unreachable goal. It may be possible to consolidate those loans, in which you take out a loan to cover all your debt at a more reasonable interest rate. You will still have the same amount of debt and will have to pay it back, but since it's all in one place with a lower rate, your payments might be more manageable. Consolidation sometimes requires a decent credit score. If you're in deep with debt, it may no longer be an option. If available, and if you foresee yourself being able to make the payments, consolidation might be an option for you. Be careful that your payments will actually be lower.
Steiden Law Offices | Northern Kentucky bankruptcy attorneys
If you are not sure what to do with your debt, we are happy to discuss your options in a free consultation. Bankruptcy may not be for you. There are options that may be better for you. However, bankruptcy could discharge the debts and end the debt collector calls permanently. Don't run from bankruptcy until you truly understand it. Call the experienced Greater Cincinnati bankruptcy attorneys today at (855) 741-3328 or send an online message to set up a risk-free consultation.