Silverberg Business Bankruptcy Law

Debt Negotiation in Consumer Cases

Consumer cases fall into two classifications — Chapter 7 bankruptcy and Chapter 13 bankruptcy. Understanding the difference between the two types of bankruptcies available to you can help you determine which one is best for you financially. Additionally, there are several types of debt negotiation options available to you as a consumer, before you make a decision to file for bankruptcy. Contacting an experienced bankruptcy attorney can help you as you move forward to make the best financial decision for your unique circumstance.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy requires you to liquidate most assets in order to repay creditors completely.  This process is quicker than a Chapter 13 bankruptcy and allows a debtor to keep any wages and property after the bankruptcy is dismissed. However, under a Chapter 7 bankruptcy, your debts must be paid, your house can be foreclosed upon after the bankruptcy is discharged, and other debts such as mortgage liens are still required to be paid.

Chapter 13 Bankruptcy

Conversely, a Chapter 13 bankruptcy allows you to keep all of your property. You are afforded an opportunity to create a repayment plan to your creditors that will allow you to repay what you owe, and extend the time you have to pay what you owe to your creditors. This reorganization of a debtor’s assets and debts affords him or her the opportunity to fulfill financial obligations and get a fresh start.

Debt Negotiation

There are four alternatives to bankruptcy that involve debt negotiation for the consumer. If possible, these alternatives can save a debtor from either a Chapter 7 or Chapter 13 bankruptcy.

  • Credit Counseling. These nonprofit credit counselors can assist a debtor with a financial review and suggest solutions to the debtor’s problems.
  • Debt Management. These nonprofit credit counseling firms actually devise specific and personalized financial plans for managing and paying down your debt. Debt management can be found in the form of an online tool or by meeting with a debt manager in person to set financial goals and create a debt negotiation plan. These can take three to five years to complete.
  • Debt Consolidation. Some nonprofit credit counseling firms will work with you for a fee to negotiate your debt with your creditors and create a plan that allows you to make a single monthly payment. Multiple creditor amounts will be combined into one large amount that can be then paid with one monthly payment and distributed to the creditors.  Oftentimes, these debt negotiation plans will allow you to reduce your actual total amount owed to these creditors.
  • Debt Settlement. A final step that will allow you to completely remove your debt problem is to negotiate a debt settlement with your creditors. Oftentimes, an experienced attorney can provide debt negotiation services to creditors and reduce what you owe in exchange for a payment plan, or payment in full for a reduced amount.

These four alternatives exist as options to avoid bankruptcy, which can stay on your credit for up to seven years. Contacting an experienced bankruptcy attorney can help you determine which debt negotiation is right for your specific financial case.

Contact an Experienced Bankruptcy Attorney

If you find yourself in the financial situation where your income is insufficient to pay your debts and your creditors, you have options. Before you file for Chapter 7 or Chapter 13 bankruptcy, consider the other debt negotiation options you have. Bankruptcy laws are ever-changing, complex, and challenging to navigate without experience. Determining which debt negotiation tactics would be best in your financial situation including examining factors such as expenses, income, debt, and assets. Serious consideration should be given when deciding how to handle your debt negotiation. Contact the bankruptcy attorneys at Law Offices of Jay Silverberg at 212-687-7000 or online for a free consultation today. 

Speak to our experienced attorney about your case; and we’ll provide you with the best solution possible.

At Law Offices of Jay Silverberg our team will analyze your case and determine whether bankruptcy is the right option for you. If yes, then we will handle every aspect of your legal process, start to finish.

We will provide you with:

  • Professional Assistance
  • Strong Legal Representation
  • Quality Guidance
  • Complete Knowledge

Which will help you make the right choice, and get out of debt smoothly, and fast.


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