As a firm with board-certified bankruptcy attorneys, we have an unusual belief: Bankruptcy isn’t for everyone.
Too often, people run to seek bankruptcy protection, without reviewing all their options. A former client once told us thank bankruptcy is a last resort, a “nuclear option,” she said. We completely agree.
If you are struggling under crippling debt, it’s tempting to jump to bankruptcy to pull yourself out. Before you do, here are some things to consider.
Don’t be Pressured into Bankruptcy by an Attorney
Far too often, we’ve seen fearful clients who just want to begin the bankruptcy protection process. After advising them against this action, they run to another attorney who pressures them. Already running on fear, the client takes this advice, and it ends poorly for them.
Sometimes the client discovers they aren’t eligible for bankruptcy, and their situation worsens. Believing they would be free from debt, they stopped paying their creditors. After being denied, their debt is bigger than it was before, and they’re facing consequences for late payments. We’ve seen other clients whose finances weren’t as bad as they assumed. They go through with bankruptcy, only to realize they’ve lost a lot of property they could have kept and paid for gradually.
When you find an attorney to help work on your debt, ask questions. Put them on the spot. Many bankruptcy lawyers won’t offer alternatives and discourage other options. This is a red flag. It usually means that their major concern is securing you as a client and getting paid.
Your questions could also expose a lack of knowledge. The attorney could be versed in bankruptcy law only. This tells you that they have little concern with the overall subject of debt relief.
Find Ways to Use Bankruptcy to Your Advantage
Generally, bankruptcy is seen as a failure, and people who go bankrupt use this time to rethink and rebuild their lives. This is can be true for some, but you can also incorporate bankruptcy into your overall financial plan.
Again, talk to your attorney about exactly what bankruptcy is, how it works, and how you can make it work for you. A good lawyer will have solid, concrete answers to these questions. When they do, you know you’ve found a true professional who’s working toward your best interests.
Also, take time to inform yourself. Read books on bankruptcy and financial planning. There are many free online resources available, and you can always turn to your local library. This will keep you from spending more money while considering your next steps. Bankruptcy is not an act you should take lightly or impulsively. Learn as much as you can, and find an attorney who will help you make the best choices.
Alternatives to Bankruptcy
A good attorney should have many tools in their belt. They should be able to negotiate a client’s debt when bankruptcy is the wrong choice. Make sure to introduce this idea when meeting with a potential attorney.
Through debt negotiation, you work with your creditors, settling on new ways to pay off your debt. Often, the biggest problem with debt is the monthly payments. Spending so much money you never see again makes it harder to buy groceries and pay the rent. Debt negotiation can cut down on your monthly expenses, giving you more breathing room for everyday spending.
Debt negotiation can lower your payments in several ways. You could agree to an interest reduction, for instance. Typically, this is not a complete alteration of your interest rate. Creditors usually offer a “step-up” interest in a negotiation. Essentially, they lower your rates in the first year, and the rate goes up annually from there.
You could also qualify for lower monthly payments. This means your debt will take longer to pay off, but your month-to-month finances will be much easier to manage.
Debt negotiation typically results in your spending more money overall. For some, this is not an option, and bankruptcy is a better alternative. For others, this choice gives them a chance to make it through each year, knowing they will eventually be debt-free.
Remember, these are only a couple of the many options you have for debt relief, and a good attorney will be aware of these and much more.
Florida Attorneys Who Can Help
At The Dellutri Law Group, PA, our attorneys will never pressure you into one decision or another. We know that we work for you, and our job is to protect your interests. We offer free consultations, and we are ready to give in-depth answers to all your challenging questions. For help with bankruptcy and debt relief in Florida, call us today at (800) 391-4337, or contact us online.