Is there an alternative to bankruptcy in the state of Florida?

Fri, Jan 27, 2012

Bankruptcy, Debt Mitigation

image courtesy of 401KBankruptcy is often a good choice for individuals facing overwhelming debt. Bankruptcy offers a solution to financial crisis for many people when there is no other relief in sight. However, many Floridians do not know there are alternatives to bankruptcy.

We have all seen signs on the side of the road that offer: Cheap Debt Removal! But how legal can that be? If you are seeing it advertised on a hand-lettered sign on the side of the road, that debt removal may not be so legal. However, hiring an attorney to negotiate with your debtors is legal and well-accepted, especially in today’s brutal economy. This service is called debt mitigation.

Debt mitigation is a reduction in payment for loans or other debt you owe. This can be achieved by reducing the amount due and/or the interest rate, or increasing the time you have to pay the debt, or all three of these together. Increasingly, financial institutions are creating programs using these methods to help debtors just like you.

Unscrupulous firms have tarnished debt mitigation’s name over the past few years. There are many companies calling themselves credit counselors, that mislead consumers into agreements that do not help them in the end; and they are charge outrageous fees for this unethical arrangement.

This is not the true nature of debt mitigation. Licensed attorneys and other financial professionals can ethically reduce your debt load so that you can avoid bankruptcy. They will charge you a fair price and make sure that the debt is properly reduced in an ethical way using a legal contract. Debt mitigators will discuss your debts with each financial institution or creditor, to see what can be done to reduce your debt load. They will negotiate with banks, credit card companies, car loan companies, mortgage companies, etc. Discussions about interest rates, principal amounts due, and more factor into these negotiations to reach the best debt settlement possible. Many companies are open to discussing debt settlement, since they prefer the likelihood of receiving a percentage of their money, instead of losing any repayment opportunity because a debtor files bankruptcy. For more about how debt mitigation works, please read this section of our website.

Choosing debt mitigation over bankruptcy is a choice best discussed with legal professionals. They can help you choose the correct path for your circumstances. Please consider your options if you are facing large amounts of debt due to job loss, health problems, divorce, or other situations. Debt mitigation may be preferable to spending years repaying debts with daunting interest rates or enduring the stress of bankruptcy. Christopher Smith is available to discuss both your bankruptcy and debt mitigation options.

Image credit: 401K

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