If you are a resident of South Carolina who is facing financial difficulties, you aren’t alone. Thousands of South Carolinians end up filing for bankruptcy protection every year. If you are considering filing for bankruptcy, you should know that should be your last option when you are deciding how to face your financial woes. You need to look at all of your options and study the various alternatives available to you before opting for South Carolina bankruptcy – Chapter 7 or Chapter 13.
There are several different options available to South Carolinians who are facing financial problems. Just remember, what might work for you might not work for someone you know. You need to understand all your options so you can make the best choice for your particular situation. The David Aylor Law Offices work with clients to help them come up with the best solution for their particular financial situation. If your money problems are keeping you stressed, call us for help coming up with an effective financial solution. We will make sure you understand the alternatives to filing bankruptcy so you can determine if bankruptcy is the best choice for your predicament.
Several Bankruptcy Alternatives are Available
Almost everyone gets behind on a few bills at one time or another. After all, any of us can face financial woes. However, bankruptcy is not your only way out. There are currently several alternatives to filing bankruptcy. You need to be aware of all these alternatives and how each of them works. By fully understanding them, you will be able to make an informed decision about which of these options will work best for your situation and help you get out of the challenging situation you are currently facing. When you give your financial situation a closer look, you might find out bankruptcy is not the right solution for your situation at all. The David Aylor Law Offices have experienced bankruptcy attorneys who can help you make the right choice regarding your money problems. We take the time to explain the options and help you come up with the right way for you to take care of your situation.
Stop the Harassment
As an example, if you are tired of being harassed by creditors and stopping that harassment is your main concern, then bankruptcy is most likely not the best solution for you to choose. You don’t have to file for South Carolina bankruptcy protection to get creditors to stop harassing you. There are federal and state laws regarding debt collection practices that you can use to your benefit. The Fair Debt Collection Practices Act (FDCPA) was enacted to protect people just like you -consumers – from wrongful and abusive debt collection tactics. You can use these laws to your benefit. You can send creditors a cease and desist, which is a letter telling them that they can no longer contact you on the phone. This must be sent in writing by certified mail to confirm it was delivered. If the creditor doesn’t adhere to the request they are violating the law and you can seek up to $1,000 in damages for FDCPA laws being violated. Our offices can help you with such matters and help you stop the harassment you might be encountering from creditors and debt collectors.
Negotiate with Creditors
If you have some kind of income and assets that you can part with and sell for additional income you might be able to negotiate with your creditors. This is much better than filing for bankruptcy. When you negotiate with your creditors, you might get some extra time so you can get back on your feet. Your creditors might even agree to settle your debts for less than the amount that you actually owe. As an example, many creditors will deduct 30%, 40%, or even 50% off the face value of a debt in order to get some money because of course, some money is much better than getting no repayment at all. Sometimes you might need help negotiating with your creditor to ensure you get the best deal available. When you need help negotiating, an attorney or credit counselor might be able to offer you the help you need. There are several alternatives to filing bankruptcy available and this is just one of many options out there.
Work with a Credit Counseling Agency
If you aren’t comfortable negotiating with a collection agency or a creditor, you can enlist the help of a licensed credit counseling agency. You might not be comfortable with your negotiation skills, or it might be too stressful dealing with those hard-nosed creditors on your own. There are non-profit credit and debt counseling agencies that can help you come up with a plan to repay your debts and improve your overall financial standing. Make sure you check the listings for these agencies and choose an agency that has a good rating with the Better Business Bureau, has the appropriate professional memberships, and is licensed. You want to check reviews and ratings as well.
Differences in Debt Counseling and Chapter 13 Repayment Plans
If you file Chapter 13 bankruptcy, you are going to repay your debts through a monthly repayment plan. You might be wondering what is the difference between Chapter 13 repayment plans and debt counseling repayment plans. There are some similarities between the two, but they are very different. The debt counseling agency will help you come up with an affordable plan so you can repay your creditors over time. The advantage is there will not be a bankruptcy record show up on your credit report. Because bankruptcies are filed in court, they stay on your credit report for a while. As an example, completed Chapter 13 bankruptcies are on your record 7 years while a discharged Chapter 7 bankruptcy mars your credit report for 10 years. Any late payments can stay on your report for up to 7 years. There are disadvantages to debt counseling plans as well. If you miss a payment in Chapter 13, you are protected from creditors who might want to immediately resume collections, but you don’t have that protection with a debt management program. Just one creditor can decide he isn’t happy and pull the plug on your plan. With a credit counseling program, your debts usually must be repaid in full while in Chapter 13 you only repay a small portion of your unsecured debts.
Just Sit Back and Not Do Anything
While being late to pay your bills might be stressful, especially when the debt collectors start calling, you might be surprised that many people in debt think it is better to just do nothing at all. That means no bankruptcy or no credit counseling and no repayment plan. If you live simple with a minimal amount of property, have very little income, and plan to live that way in the future you might be “judgment proof.” In order to be “judgment proof,” it means that if you are sued and someone gets a court judgment, they won’t be able to collect on that judgment because there is nothing that they can legally take from you. Unless it is a very unusual situation, such as refusing to pay taxes or child support, you cannot be jailed for non-payment of your debts. Creditors are not allowed to take away your essentials, such as regular household furnishings, clothing, personal effects, food, unemployment benefits, Social Security benefits, or any public assistance that you might receive.
Getting on Track to Gaining Financial Freedom
If you are facing money problems, you need to get out of debt and rebuild your credit. To do that, there are several things that you need to do so you can make sure your finances are properly prioritized and in order. If you are facing wage garnishment, foreclosure, lawsuits, repossession, or continuous collection calls, you need to understand your rights and your bankruptcy alternatives. You need to have the basic skills and tools to get your finances in order. Here are a few things that you will have to do to get yourself out of the situation you are in if you are overwhelmed by debt:
- prioritize your debts
- create a budget
- understand the different options you have
- negotiate with your creditors
- stop harassment by debt collectors
- deal with foreclosure, repossession, and wage garnishment
- reduce your student loan payments
- rebuild your credit
- know what to do and what to expect if sued by a creditor
- decide if you should file bankruptcy or use some other alternative that is available
Some Other Alternatives to Filing Bankruptcy
There are several alternatives to filing bankruptcy, and whether they will work for you depends on the amount of your debt, your assets, and your available income and resources. Here are a few other alternatives that work for some people and help them get finances back on track and avoid bankruptcy.
Debt Consolidation Loan – A debt consolidation loan combines multiple debts into one loan and thus, a single payment. While you still end up owing the same amount of debt, your interest rate and the monthly payment are usually much lower than they were when you were making separate payments to several different creditors. Often a debt consolidation loan can be used to consolidate several thousands of dollars’ worth of debts.
Transferring Debt – Some credit card companies offer special deals which give new customers lower interest rates to get them to transfer their debts. When you have the opportunity to transfer the debt and keep the interest rate low until the debt is fully paid, you will end up paying much less interest over the repayment period. If you can transfer your credit card debts to a single card with lower interest, you can save a lot of money and turn several payments every month into a single payment.
Home Equity Line – If you have equity in your home, you can consolidate your debt into a lower interest rate and potentially have a loan that is tax-deductible. You need to use caution when borrowing against your property because if you default your property might be repossessed. While a home equity line of credit can be very helpful and fix many financial problems, it should be used with caution because you could risk getting behind on payments again.
Free Case Review
Are you worried about your financial situation? Are you not sure if the alternatives to filing bankruptcy or filing bankruptcy would be best for you? If you aren’t sure what your next step should be, you should consult with an experienced South Carolina bankruptcy attorney at the David Aylor Law Offices. Our lawyers can help you get your finances in order and help you make the best decisions regarding your current financial situation. Call us today at (843) 310-4900 to schedule an appointment with a member of our bankruptcy team. If your credit problems are keeping you awake, don’t worry. We have attorneys available 24/7 to help answer your questions.