Going Bankrupt? Here’s How To Avoid It
Although bankruptcy is something that sometimes needs to happen, you’ll find that there are more ways to avoid it than you might think. As in a divorce, where couples should try to work things out if at all possible, you’ll find that bankruptcy should be something that you approach with care and with a lot of investigation into other options. Bankruptcy is never an easy way out, so take some time to review what other options might have, especially in light of some of the new bankruptcy laws.
Doing Nothing May be Your Best Answer
Though it might seem strange, remember that sometimes the best action is no action. There are lots of people out there who will tell you to take charge of your life, but remember that sometimes choosing the right course of inaction with your creditors might be the best thing that you ever did. Why should doing nothing get you somewhere? Remember that creditors need to take you to court if they want to collect. This means that they will be investing thousands of dollars in legal fees before they will ever see another dime out of you. Think about it rationally. If your debt is less than the cost of court fees, chances are good that they will not sue you. It is possible that you will run into the odd creditor who will sue you out of principle or to make a point, but this actually fairly rare. Remember that good creditors stay in business because they know not to throw money away.
No Money at All
Even if you wanted to pay off your debt, is it possible that you just can’t? The truth is that any good business person knows that you cannot squeeze blood from a stone and if they are smart, they won’t even try. Consider a situation where you owe three different creditors 500 dollars, 1,500 dollars, and 4,500 dollars. The first creditor is most likely not going to take you to court for 500 dollars because that would barely cover the legal fees that they need to pay.
Another important factor here is that they can only take from certain resources. If you’re sitting there thinking they’re going to take away food, clothing, furnishings, social security, unemployment, and assistance money, they can’t. In fact, they can’t even take away from 75% of your earnings. Even if they continue to call, send them a letter stating you have no intent to pay. By law they have to stop attempting to collect.
Remember that as annoying as phone calls and dire letters are, a debt collection agency needs to stop attempting to collect a debt once you inform them in writing that you have no intention of paying it. One thing that you might wish to try is to deny knowledge of the debt whenever you speak with the creditor, because acknowledging that the debt exists restarts the statute of limitations that will legally erase your debt.
How To Negotiate Away Your Debt
Even though we wanted to cover this, we know most people won’t take advantage of it. There is something about having to call up creditors and asking them for a lower overall cost. Just remember though, for those that do utilize this, most companies want to settle out of court. Just knowing the smallest details such as this could change the way you think about filing for bankruptcy.
Then of course there is always the chance you go and talk with a bankruptcy lawyer. Getting the lay of the land before taking the leap is extremely important. Let them tell you about what you can expect and the path it will lead you on for the next decade. It’s a long journey and many individuals and families don’t realize it in the beginning. Heck, they may even help you start a debt settlement plan for the upcoming months.
When it’s all said and done we recommend utilizing a credit counseling program. Taking this route will allow you to get the appropriate help and understand the in depth material covered in bankruptcies and creditors. It will show you how the future is going to look, as well as the other side if you choose to stay away from bankruptcy all together. All you need is a reputable company to help you along the way like Nationwide Debt Solutions. Utilizing a big name like this will help you get back on your feet in no time.
Daniel R. Michaelson is a well known public speaker and author in the area of consumer debt relief and has been helping clients for nearly 20 years. You can learn more about his debt consolidation program.
