Alternatives to Bankruptcy

Published on July 18, 2020 by J. Andrew Meyer

Alternatives to Bankruptcy

Many Americans faced with overwhelming debt are looking for answers on how to find relief from being unable to repay what they owe. One of the most common routes is filing for some form of bankruptcy to get a fresh start. While bankruptcy may be the best option for some, there are less drastic alternatives that do not cause such severe damage to your credit. This article outlines a few options for resolving individual debt that do not include bankruptcy. However, it is important to note upfront that if you are facing unmanageable debt, then you should consult with an experienced attorney who can provide you with the best guidance for your specific situation.

Disputed Debts

If you are facing collection from a creditor and you do not believe the debt is justified, one alternative to bankruptcy is to dispute the debt. Depending on how far along you are in the collections process, there are a number of ways to fight disputed debt. If you are currently past due on the debt, and the creditor has reported the debt to one or all of the credit agencies, the easiest option is to appeal the negative credit reporting. Each credit reporting agency has different rules on disputing negative ratings, but generally you must file a written appeal with the agency detailing why you believe the report is inaccurate, and you typically provide any proof that bolsters your case. The agency will then give the creditor an opportunity to respond before ultimately making a decision. Sometimes creditors simply do not respond to the credit agencies’ requests which results in the negative reporting being removed. A less common but potentially effective method of disputing debt is fighting the debt in court. Unless free legal counsel is available, the costs of such a lawsuit may be considerable. However, if the debt is large enough, it may be worth the investment to obtain a fair settlement. In many cases where a consumer protection statute is violated, the creditor may be required to pay the debtor’s attorney’s fees if the debtor ultimately wins the case or obtains a favorable settlement.

Debt Consolidation

There are a number of services available for debtors which can allow them to consolidate all of their debt and make repayments under a manageable payment schedule. These services negotiate with your creditors on your behalf and can often eliminate or reduce your total debt. Costs for these services vary, so it makes sense to consult with multiple agencies to get the best rate for consolidation. Similar to debt consolidation services, lenders provide debt consolidation loans. Under these programs, the lender pays off all of your existing debt with a loan under the condition that you agree to make monthly payments to the lender with interest. While this does not erase your debt, it does provide a way to avoid the costs associated with filing for bankruptcy in addition to the fee of hiring an attorney to fight disputed debt in court. Finally, some states have programs that will help you with utility or mortgage bills if you are behind. Before filing for bankruptcy, you should investigate these programs.

Florida Bankruptcy Attorneys

The attorneys and staff of The Bankruptcy Team have decades of combined experience helping clients with mortgage modifications, foreclosure defense and bankruptcy alternatives to effectively resolve their financial problems. If you are dealing with an unmanageable debt situation and are contemplating bankruptcy, reach out to The Bankruptcy Team to consult with one of our bankruptcy attorneys today.

J. Andrew Meyer

Andrew Meyer was born in Deland, Florida, in 1970. He graduated with an International Baccalaureate Degree from St. Petersburg High School in 1988, and attended the University of Florida, graduating in 1991 with a degree in Economics awarded with High Honors. Mr. Meyer also attended law school at the University of Florida, receiving his juris doctorate degree in 1995. While at the University of Florida, Mr. Meyer was inducted into Florida Blue Key and Phi Beta Kappa. Mr. Meyer was first trained as a lawyer by Richard T. Earle, Jr., and thereafter worked at the Attorney General's Office for the State of Florida in the Bureau of Criminal Appeals before becoming a senior staff attorney for the Florida Second District Court of Appeal. Mr. Meyer also served as a law clerk to the Honorable Chris W. Altenbernd, Retired, at the Second District Court of Appeal. Following his time at the Second DCA, Mr. Meyer worked at Carlton Fields, focusing his practice on appellate matters. In 2004, Mr. Meyer became an advocate for consumers as a partner at James Hoyer, and then later moved to Morgan & Morgan's class action department in 2009.

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Alternatives to Bankruptcy