Before considering all of your options, do not let a pushy law firm persuade you that filing for bankruptcy is the best course of action. You can reduce your debt in a variety of methods, some of which may be more suitable to your particular circumstances. In some instances, the greatest method for reducing debt may be the most obvious: saving more. By reducing frivolous expenditure and acquiring better financial habits, you may be able to find a solution to your debt that will set you up for a better financial future for the rest of your life.
Nevertheless, this cannot always be the intended solution. In some instances, the debt is too far gone for such a basic solution to be effective. Here, a lawyer will be able to assist you in evaluating all possible alternatives. For instance, you might attempt to negotiate the interest rates on your loans. This may be the case if you have taken out payday loans on credit cards; while not always possible, an aggressive attorney may be able to reduce your monthly payment or negotiate a reduced interest rate so that you can more easily afford to pay it off.
Debt consolidation is another alternative to filing for bankruptcy. This is exactly what it sounds like: a method to consolidate all of your open debt lines into a single, secured debt. This is ideally a debt with a reduced interest rate. Thus, you can enjoy the peace of mind that comes with having to pay only one debt per month, at a secure rate and for less than the various interest rates you were previously dealing with.
If you find yourself confronting foreclosure, you should also be aware that there are a variety of options available to you in an effort to save your home. Bankruptcy may appear to be the obvious option, but it may actually be too drastic. You could, for instance, investigate what is known as a short sale. This option allows you to sell your property, typically for less than you owe on it. In this option, you would negotiate with the lender to resolve the debt for less than the actual amount, with the lender receiving the proceeds from the sale. This is not always the most desirable option because you will lose your property, but you will no longer be in over your head with unaffordable mortgage payments.
Consider the possibility of a deed-in-lieu of foreclosure as an alternative to foreclosure. In this scenario, you would hand over the title to your property to the lender, which would be sufficient to settle the debt. In this scenario, you again lose your property, but you avoid the negative credit impact that a foreclosure would have. Additionally, you are able to resolve your debt in full, restoring your financial stability.
Finally, it would be in your best interest to investigate loan modification. This option permits an attorney to negotiate with your lenders regarding your loans, whether for a mortgage or a vehicle loan. The agreement could stipulate a longer loan term for more time to spread out payments, a lower interest rate, or even a reduction in the principal balance. The reality is that lenders do not want you to file for bankruptcy because they would likely never see their money under this scenario. By modifying the loan, at least a portion of the money will be returned.
If you are currently struggling with debt, these are merely a few of the alternatives that are available to you. The best method to determine what your best option is is to consult with an experienced Houston debt relief attorney in your area. You should not feel compelled to file for bankruptcy, and by working with an experienced attorney, you will be able to find a solution that you are comfortable with and that helps you put your life back together.""
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