If you are contemplating filing Chapter 7, you should consider some alternatives that are available. They include a debt consolidation loan, Debt counseling, and debt work-outs.
Other alternative to Chapter 7 bankruptcy include a Chapter 13 Wage Earners Plan, a Chapter 11 Debt Reorganization or a Farmers Plan under Chapter 12.
A “Wage Earners Plan” refers to a proceeding under Chapter 13 of the Bankruptcy Code and is also called “Adjustment of Debts of an Individual with Regular Income.” This repayment plan is now available to individuals with regular income from any source, such as wages, self-employment, investments, various benefit payments, and so forth. Under Chapter 13 you repay all or a portion of your debts under the supervision and protection of the Bankruptcy Court. Filing a plan of repayment with the court prohibits the creditors from direct collection of the debt. The creditors are forced to accept the plan. The plan usually lasts between three and five years. Upon completion of the payments called for in the plan, you are discharged from any liability for the remainder of your debts because you have paid all that you must under the law.
A Chapter 13 proceeding is often preferable if you wish to repay all or most of your debts and you have the income with which to do so. The court will provide for the additional time needed to pay and provide for better terms of payment. It is particularly valuable if you have valuable nonexempt property or exempt property pledged as security for debts, either of which you could lose if you filed under Chapter 7. If you are not eligible for a discharge under Chapter 7, or you have one or more substantial debts that are not dischargeable under Chapter 7, you might want to consider filing a petition under Chapter 13 of the Bankruptcy Code.
Debt reorganization under Chapter 11 is designed for more complex situations. High debt individuals, as well as businesses, often find the time and flexibility provided by Chapter 11 as a better alternative than filing a Chapter 7 bankruptcy.
Chapter 12 is for farmers and works similar to a Chapter 13 but has some aspects of Chapter 11. Because it also is more complex, farmers should be personally advised regarding its advantages and disadvantages and whether they qualify.
Debt Consolidation is a widely used term to describe debt repayment plans that allow you to get out of debt as quickly as possible. Debt negotiation and settlement is a great alternative to bankruptcy for those who want to, or are able to, pay back at least a portion of their debt.
The Turoci Bankruptcy Firm will work to negotiate with your creditors for a less-than-full repayment or settlement. When settlements are reached with creditors one payment is made to the creditor and no further debt is owed.