“O” in the Bankruptcy Alphabet is for “Options” to Bankruptcy

By Christopher C. Carr, Esq. Chester County bankruptcy attorney.

Tel: 610-380-7969 Email: cccarresq@aol.com Website:westchesterbankruptcyattorney.org

Green O from Dave Q  O is for Options or Other Alternatives to/in Bankruptcy.

If you are behind on bills or can’t afford your mortgage payments, filing a consumer bankruptcy is certainly one option to consider. You can read my Rocket Lawyer blog:  Filing Bankruptcy: Pros and Cons to learn more about the types of bankruptcies. However, some people do not wish to file bankruptcy for a variety of reasons and there are certainly circumstances under which filing a consumer bankruptcy is NOT advisable. Supra Lawyer lists 7 such reasons.   For those clients who cannot or will not declare bankruptcy,  there are alternatives not requiring a bankruptcy filing , including:

  • Debt Settlement (AKA Debt Management): Debt Settlement offers a structured debt repayment plan, whereby you pay only a portion of the original debt. This is not the same as debt consolidation where one big debt simply replaces a lot of little ones. Oftentimes, you pay a budgetable fixed sum every month for from 3-5 years and the servicer uses that fund to settle with the creditors as it builds up. It is important however, to ensure that you are dealing with a reputable organization before “investing” with any such entity.  (The FTC has recently revised the Telemarketing Sales Rule to encompass debt settlement companies which will hopefully bring some regulation to this industry.)
  • Mortgage Modification (including Home Affordable): If you own a home and do not wish or need to file a Chapter 13 Bankruptcy, a mortgage modification may be a better option than bankruptcy as the filing of the HAMP Application will also avoid mortgage foreclosure while in consideration by the Lender. The government is attempting to streamline this process and, as the name implies, make monthly rates far more affordable for those who qualify by requiring banks which took bailout money to offer the Home Affordable Loan (HAMP). Others have joined the program voluntarily seeking to take advantages of the financial incentives being paid by the government. However, the program has been moving very slowly to date because it has been left up to the banks to administer. For those who do not qualify because of income or other reasons or because their bank simply does not offer a HAMP, there are usually conventional programs offered by the lenders, typically with less favorable terms. There are also special programs available for those who have Fannie Mae or Freddy Mac backed loans.
  • Debt Settlement & Mortgage Modification: a potent combination for the in debt home owner may well be to combine a debt settlement program to reduce unsecured debt with a mortgage modification to reduce monthly mortgage payments, as these in combination can resolve most of the pressing debt issues for many homeowners.
  • Other Programs: There may be other alternatives for homeowners, especially for those who cannot take advantage of any of the above programs and are willing to enter into a short sale or deed in lieu of foreclosure and exit gracefully from their homes. In addition, there may be short or long term aid available to eligible homeowners at the state or local level, such as the Act 91 (HEMAP) program in Pennsylvania. (Unfotunately, word is that there is no longer funding available under this program which was partially federally funded.)
  • Bankruptcy as a Last Resort: Properly speaking, bankruptcy is not always a last resort.  In fact, consumer bankruptcy can be used by eligible persons not otherwise in need of a “fresh start” to effect such things as stripping off junior mortgages; reducing high auto payments: removing a large debt load or dealing with a significant arrears on a residence.  However, it is important to recognize that the eligible debtor who has tried and failed to utilize one or more of the above programs, may still avail themselves of bankruptcy as a last resort, to save their home, car and/or seek protection from their creditors. In addition, in certain circumstances a bankruptcy working in combination with one of the other above options, for example a Chapter 7 bankruptcy in concert with a mortgage modification, may be a potent option. In addition, a debtor who is current on their mortgage payments under most circumstances may exercise the “retain and pay” option to keep their home, under Section 521 (a) (2)  of the Bankruptcy Code which remains largely intact after the 2005 amendments to the Bankruptcy Code.

The key point is that each debtor’s situation is unique and deserves special consideration. Further, because the process is hardly ever as smooth as it is supposed to be because of the complexities and pitfalls involved, it is advisable to consult a competent and compassionate attorney who has experience in bankruptcies and/or in negotiating modifications to guide you through the process and help you properly complete the paperwork.

Law Offices of Christopher C. Carr, MBA,  P.C., is a quality bankruptcy and debt relief practice, located in  Valley Township, west of Coatesville, Pennsylvania, where Attorney Christopher Carr, a Chester County bankruptcy attorney, who has over 30 years if diversified ;egal experience, concentrates on serving the residents of and businesses located within Western Chester County and Eastern Lancaster County, Pennsylvania, including the communities in and around Atglen, Bird in Hand, Caln, Christiana, Coatesville, Downingtown, Eagle, Exton, Fallowfield Gap, Honeybrook, Lancaster, Lincoln University, Modena, New Holland, Parkesburg, Paradise, Ronks, Sadsbury, Thorndale, Valley Township, Wagontown & West Chester,  Pennsylvania. If you reside or do business in the area and need assistance with a legal issue, please call Mr. Carr at (610)380-7969 or write him at cccarresq@aol.com today!  

I also provide Mortgage Modification Services.

©Christopher C. Carr, Attorney at Law 2009, 2012, All Rights Reserved

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18 comments on ““O” in the Bankruptcy Alphabet is for “Options” to Bankruptcy

  1. […] Tampa Chapter 13 Bankruptcy Lawyers Florida Debt Repayment Plan Attorneys Stop Foreclosure Law FirmResidency Requirement for Bankruptcy in San Diego, CaliforniaDeciding Between Short Sale and Bankrtuptcy for your Home in ArizonaHow A Very good Bankruptcy Lawyer Will Facilitate You — Toronto Bankruptcy LawyersWhat is a Bankruptcy Repayment PlanChapter 7 Bankruptcy: Your Guide To A Fresh Start : Universal Games Guide : Best Review For All GamesNew Student Debt Repayment PlanChapter 7 bankruptcy remains on your credit report for 10 years …Chapter 7 bankruptcy remains on your credit report for 10 years …O is for Options to Bankruptcy […]

  2. […] Mortgage Modification (including Home Affordable): If you own a home and do not wish or need to file a Chapter 13 Bankruptcy, a mortgage modification may be a better option than bankruptcy as the filing of the HAMP Application will also avoid mortgage foreclosure while in consideration by the Lender. The government is attempting to streamline this process and, as the name implies, make monthly rates far more affordable for those who qualify by requiring banks which took bailout money to offer the Home Affordable Loan (HAMP). Others have joined the program voluntarily seeking to take advantages of the financial incentives being paid by the government. However, the program has been moving very slowly to date because it has been left up to the banks to administer. For those who do not qualify because of income or other reasons or because their bank simply does not offer a HAMP, there are usually conventional programs offered by the lenders, typically with less favorable terms. There are also special programs available for those who have Fannie Mae or Freddy Mac backed loans.Source: wordpress.com […]

  3. Hello – I appreciate the ability to leave a comment on your site. I like finding excellent information regarding personal finance, avoiding bankruptcy, and related subjects because there’s a lot of poor info being distributed these days. I honestly think that too many people these days are carrying an excess of personal debt, and any education they are able to receive to enhance their financial well-being is to their advantage. Particularly now going into 2012 with the World’s economic climates not on stable ground, having as little personal debt as possible can only be a positive thing. Again, thank you and keep up the great work and content on your site.
    It’s important to learn everything you can about financial management and related concepts to help keep yourself in a strong position during 2012 – first and foremost, avoid bankruptcy wherever possible!

  4. […] is for Objection. O is for Own. O is for Omitted. O is for Options to Bankruptcy. O is for […]

  5. Bankruptcy is certainly an option when we are in trouble and we cant clear our due payment but before filing bankruptcy we must think about all pros and cons as bankruptcy saves you but it may also create some trouble in future.

  6. […] Own-New York Bankruptcy Lawyer, Jay S. Fleischman Omitted-Bay Area Bankruptcy Lawyer Cathy Moran Options to Bankruptcy-Suburban Philly Bankruptcy Lawyer, Chris Carr Obligations-Colorado Springs Bankruptcy Attorney Bob Doig OOPS-Metro Richmond Consumer and […]

  7. […] Suburban Philly Bankruptcy Lawyer, Chris Carr reports that O is for Options to Bankruptcy. […]

  8. […] Omitted Own Options to Bankruptcy Obligations OOPS Objection to Discharge Omitted creditor […]

  9. […] Options to Bankruptcy, Suburban Philly Bankruptcy Lawyer, Chris Carr […]

  10. […] an EXPERIENCED FULL SERVICE CONSUMER BANKRUPTCY EXPERT to advise you and most importantly what your OPTIONS are and to help you to plan so that you can optimize your […]

  11. debt relief options…

    Sometimes the results are not what you might expect. Lincoln County | Storm/Flood Recovery made me think more about this issue, and I am grateful….

  12. […] Options to Bankruptcy – Suburban Philly Bankruptcy Lawyer, Chris Carr  […]

  13. Nice blog here! Also your web site loads up
    very fast! What host are you using? Can I get your
    affiliate link to your host? I wish my web site loaded up as
    quickly as yours lol

    • Thanks Lawrence…I am not using any host, just Word Press which probably explains my low recognition, that and the fact that I only write about once a month because I insist that everything I write be original. I am told that you need about 50 blogs before Google takes you seriously and as I write in April 2013, I am not there yet.

  14. […] Suburban Philly Bankruptcy Lawyer, Chris Carr […]

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