If you want to reduce your debts, call a Chapter 13 bankruptcy lawyer. We can help you to negotiate with creditors through a legal process so that you can pay less on what you owe in order to create a more sturdy financial future.
If you are feeling overwhelmed by your debts and constantly receiving creditor calls, this is an important step. It is the first step to take to regain your sanity as well as your financial future. Still, one of the questions we are often asked is whether someone should work with us initially or speak with a company offering to reduce their debts. Here is what you should know about your options.
What a debt reduction specialist does.
When a person or company works to reduce your debts, they typically discuss with you what assets you have to pay your debts off. For example, do you have savings, a tax return check coming in, an RV you plan on selling, etc.? The amount of cash that you have to pay towards your debts will directly influence what they can accomplish.
With this number in mind, they call your credit card company or send them letters in an attempt to settle the debts for less than you owe. For example, if you owe $20,000 in credit card debt and have $7,000 to pay towards them, they will try to settle all of your debts for that amount. This can be effective and we actually offer this service at our office. The challenge is that you need cash to pay them with. If you do not have it, this strategy will not be effective.
What a Chapter 13 bankruptcy lawyer can do for you.
As an attorney, we can negotiate with your creditors outside of the bankruptcy process if that is what you would prefer. However, credit card companies and other lenders are often not inclined to give you a steep discount at one time or by way of reduced payments. This is what the bankruptcy process is for. It circumvents the actual companies and works through the court system.
With a Chapter 13, we are creating a plan for what you can pay and when you will pay. The plan is based on the reality of your financial situation. This plan is presented to the court and your creditors will have the opportunity to object at that time. However, the court will approve a plan if it is fair.
What we need for your plan.
In order to create your plan, we need to know what your income has been for the past six months. Therefore, you need to bring in your pay stubs, unemployment checks, etc. Then we will need to go over all of your living expenses. This includes everything that you have to pay in order to maintain a basic lifestyle. Things like gas money cannot be left out because you need it to go to work. Daycare won’t show up on your credit report, but it is important to list.
Once all of your living expenses are deducted from your income, we get the true number that you can pay towards your debts and your plan will include directing that money towards your bankruptcy on a monthly basis for a set number of years. In this way, your creditors get something, just far less than what you actually owe.
To get started, call our office and speak with a Chapter 13 bankruptcy lawyer today.