The decision to seek bankruptcy protection is one that people do not enter into lightly. In fact, many people try just about every other financial strategy they can imagine before resorting to this type of solution. For anyone who is wondering if now is the time to contact a bankruptcy attorney in Columbia TN, take the time to ask a few questions first. Doing so will determine if this approach really is the only solution.
Consolidation and Settlement Attempts
Many people try to rearrange their debts into a more manageable form before resorting to bankruptcy. For example, they may work with a lender to secure what is known as a debt consolidation loan. With this solution, all the individual unsecured debts are paid off in full. This leaves the debtor with the one monthly loan payment to make. When the debtor’s credit rating allows for this type of solution, there’s even the chance that the rate of interest applied to the loan balance will be lower than the rates that applied to each of the individual debts. When this is the case, the total amount of debt will decrease at a faster rate. As a bonus, making timely payments on the loan will halt damage to the credit rating and even help to improve if by a few points each year.
Debt settlement is another possible solution. In this scenario, the goal is to determine if individual creditors are willing to settle for less than the amount owed, in order to have the debt discharged quickly. When the creditors are willing to work with the debtor in this manner, it is often possible to settle for a percentage of every dollar owed. The proviso is that the debt must be paid off within a certain time frame. If the debtor can convert some assets into cash and settle the debts in three to six months, this can greatly alleviate financial stress.
When Nothing Else Works
For some people, consolidation or settlement is not possible. Financial counseling does not yield any solutions that would make any real impact before creditors begin to use legal means to collect past due amounts. At this juncture, the only practical thing to do is to talk with a bankruptcy attorney in Columbia TN, go over the additional resources about filing for a Chapter 7 or Chapter 13 action, and then determining the best possible course of action.
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