What are alternatives to chapter 7? 21 Answers as of July 11, 2013

My wife and I lost our jobs as a result of the current economy and, as a result, the bank will not modify our loan. Can we negotiate down our credit card debt like the banks do in order to avoid bankruptcy?

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Rosenberg & Press
Rosenberg & Press | Max L. Rosenberg
It is possible to negotiate down credit card debt. Generally as a consumer depending on your assets, liquidity, and the amount of arrearage and time late, you may negotiate the debt down as much as 60%. With the assistance of an attorney that percentage can increase to as much as 90% discounted. Attorneys negotiating debts are almost always more effective than the consumer. You should consult with a consumer attorney and/or a debt settlement attorney. Thanks for tuning in. -
Answer Applies to: Connecticut
Replied: 7/15/2011
Mercado & Hartung, PLLC
Mercado & Hartung, PLLC | Christopher J. Mercado
Yes, debt resolution is an alternative to BK and you should explore that option.
Answer Applies to: Washington
Replied: 7/12/2011
Bird & VanDyke, Inc.
Bird & VanDyke, Inc. | David VanDyke
Potentially you can offer the credit card companies a lum sum payment to compromise what you owe them. They probably wont take payments on the compromised sum. So unless you have around 50% in cash of what you owe on the cards you probably wont be able to reduce them.
Answer Applies to: California
Replied: 7/6/2011
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
Try Chapter 13. You stop the interest and pay the current balance over 60 months (or 36). You have to factor in the trustee fee (a flat 10% in the Central District of California) and the cost of the lawyer. I have had clients in "debt settlement agreements" come in with lawsuits that have been filed against them. Chapter 13 is a much better option.
Answer Applies to: California
Replied: 7/5/2011
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
Certainly there are cc firms that will negotiate down your debt.
Answer Applies to: California
Replied: 7/4/2013
    Theodore N. Stapleton, PC
    Theodore N. Stapleton, PC | Theodore N. Stapleton
    I often act as a non-judicial mediator in negotiating settlements with creditors.
    Answer Applies to: Georgia
    Replied: 7/4/2013
    Breckenridge and Walton
    Breckenridge and Walton | Alan D. Walton
    One of the requirements of the bankruptcy law is that you MUST seek credit counseling prior to filing, in part so you can consider if any other alternatives exist. I suggest you speak with a bankruptcy attorney to get a full understanding of that alternative, then go to an approved credit counselor to answer your question.
    Answer Applies to: Michigan
    Replied: 7/5/2011
    Indianapolis Bankruptcy Law Office of Eric C. Lewis
    Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
    You may try to settle debt obligations for less than what you owe, but you will likely be required to pay the settlement in a lump sum or a couple lump sums, and you will be taxed for "forgiveness of debt." Neither of these are issues in bankruptcy.
    Answer Applies to: Indiana
    Replied: 7/5/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    Those organizations are rip-offs, and any amount forgiven is reported to the IRS as income. If you get sued they can't garnish waves but they will freeze yout bank accounts. I see BK as a great option, but usually best once you're working. You may qualify for help through Legal Services.
    Answer Applies to: Virginia
    Replied: 7/5/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    Negotiation of debts is an alternative to chapter 7. Another is using a consumer credit counseling service to do this. If this don't work a chapter 13 can propose a payment plan.
    Answer Applies to: California
    Replied: 7/5/2011
    Ferguson & Ferguson
    Ferguson & Ferguson | Randy W. Ferguson
    You can try, although the banks can refuse. I do not recommend hiring a company that says they do it for you. If you can't do a seven, there are very few other alternatives.
    Answer Applies to: Alabama
    Replied: 7/5/2011
    Cartwright Law Firm
    Cartwright Law Firm | Andrea Cartwight
    Yes, you have the option of negotiating with your creditors and paying a settlement amount. However, I would not recommend you using your reserves or money to pay-off credit card debt when you are unemployed. Any money you have need to go to making your mortgage payments. If approved, a loan modification will reduce your mortgage payments and in most instances you will need to make a down payment to the mortgage company before they will accept the new agreement. Therefore, you need to be saving and only paying your normal household expenses like utilities and insurance payments. I would recommend that you talk with a bankruptcy attorney immediately to make sure you address all of your options and make sure you choose the best option for your financial situation. A Chapter 7 bankruptcy can discharge your unsecured debt while freeing up money to allow you to make your mortgage payments. A Chapter 13 is a form of reorganization, which would allow you to catch up your mortgage payments as well as prevent a foreclosure.
    Answer Applies to: Michigan
    Replied: 7/5/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    You can negotiate down the credit card balances but you will need to pay the negotiated amount in one lump sum. Suppose you negotiate down and pay some of the cards and the others don't want to make a deal.... then what? Do you have enough cash to negotiate down and make large lump sum payments? What if they just sue you while you are trying to negotiate? Much to think about..... unless it is very few cards and you have enough cash then it will probably not work and you will end up filing a bankruptcy case which is probably the right solution. Talk to a local bankruptcy attorney and then decide which is the best solution for your situation.
    Answer Applies to: California
    Replied: 7/5/2011
    Financial Relief Law Center
    Financial Relief Law Center | Mark Alonso
    You could try to negotiate down your debt in order to resolve those balances and then free up some cash flow so that you can afford your mortgage payment. In order to do this, and avoid a chapter 7 bankruptcy, you would need one of two things: 1- already have funds from which to settle your debt or 2: time to set aside funds from which to settle your debt. I'm not sure how much debt you have, or how much you could set aside each month, but if you are unemployed, I don't know if you would be able to afford saving funds to settle your debt. The other issue to consider is how far you are already behind on your credit card payments or if you are still current. I would definitely recommend speaking to an experienced bankruptcy attorney who is knowledgeable in debt settlement and loan restructuring to obtain advice on how to approach your overall situation. Speaking to an attorney who only does bankruptcy may result in giving you narrow options, when there may be more for you to consider.
    Answer Applies to: California
    Replied: 7/5/2011
    Law Offices of Sheryl S. Graf
    Law Offices of Sheryl S. Graf | Sheryl S. Graf
    Without knowing all the facts of your case and having a clear understanding of all your particular financial circumstances, I am unable to give you any specific advice. If it makes you feel any better, you are not alone. Most people want to repay their debts, but are sometimes unable to do so due to circumstances beyond their control. Your first step in deciding what would be best for you should be to meet with a qualified attorney who helps people file for relief under the bankruptcy code. An experienced attorney should provide to you at no charge a detailed description of the relief available under the bankruptcy code, the benefits and the risks of filing for bankruptcy; and an analysis, based on the information and documents provided by you, of whether bankruptcy may be an appropriate remedy for you. If it appears that bankruptcy may not be an appropriate remedy for you, then a qualified attorney can advise you of other possible alternatives.
    Answer Applies to: California
    Replied: 7/5/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Possibly, but given that you've both lost your jobs, even if your credit card lenders are willing to settle these debts, with what resources are you going to pay them? Do you have some source of funds with which to work something out with them? Otherwise, I'm not sure I see an alternative.
    Answer Applies to: California
    Replied: 7/5/2011
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    There are a lot of scammers out there who claim to do that. Honest companies include Money Management International and Springboard.
    Answer Applies to: Virginia
    Replied: 7/11/2013
    Symmes Law Group, PLLC
    Symmes Law Group, PLLC | Richard James Symmes
    Your alternative is to do debt settlement, however you need to settle the debts usually with a lump sum. Chapter 7 bankruptcy sounds like your best option.
    Answer Applies to: Washington
    Replied: 7/5/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    You can try, but then you pay taxes on what is forgiven, and typically you won't get everyone to agree. After you try, you may find Chapter 7 may solve more problems better.
    Answer Applies to: Georgia
    Replied: 7/5/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Most credit card negotiations are either a temporary interest rate reduction, a temporary minimum payment reduction, or if you want a permanent resolution, it would require negotiating an amount to pay and paying that immediately.
    Answer Applies to: California
    Replied: 7/5/2011
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