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Los Angeles County - Alternatives to Bankruptcy

If you are considering filing for bankruptcy in Los Angeles County but want to explore alternatives to bankruptcy as well, there may be a few options depending upon your circumstances if your financial difficulties have just started. Keep in mind that by the time most individuals begin to consider bankruptcy, the options may be limited or nonexistent. This is because many mistakenly view bankruptcy as a last resort, rather than as a viable solution to financial problems. This can result in a lot of unnecessary stress for everyone involved.  Your best option is to explore any alternatives with the understanding that bankruptcy may be a better solution if your financial troubles have steadily worsened, or do not show any immediate signs of improving.

Alternative 1: Payment Arrangements

If you've only missed one or two payments, you may be able to make payment arrangements with an individual creditor that allows you to make up the missing payments and get your finances back in order. Payment arrangements are typically available in most instances when there is a very temporary financial hardship involved - generally those that aren't expected to last more than a month or two. However, different creditors handle payment arrangements differently. While one creditor may accept installment payments over the long term, another creditor may expect you to pay in full by a certain date, or may not accept installments at all. You may have to negotiate with your creditors in order to reach a payment arrangement that you can afford.

If you do make payment arrangements with your creditors, ask to get the terms of the arrangement in writing so that you have proof of the arrangement if collection activities continue. If you can, ask that the creditor withhold negative reporting to the credit bureaus for as long as you maintain your end of the agreement - this can help you preserve your good credit, even if you can't pay on time.

Alternative 2: Credit Counseling

If you can't negotiate with your creditors on your own, a credit counseling service may be able to have success on your behalf. Credit counseling services negotiate with creditors for lowered payments, reduced interest rates, and other terms that are favorable to the consumer. You consolidate your debts, and repay them through the credit counseling service, who then distributes the payments to your creditors based upon the agreed plan. This can be beneficial if you have a steady source of income to repay the debts, and can find a reputable credit counseling service.

Be wary of any company that asks for payments up front, before you can take advantage of the service. And pay attention to the terms of the agreement - if you default on the credit counseling repayment plan, there may be steep penalties imposed by your creditors.

If you are considering alternatives to bankruptcy you must be certain that you have the means to follow through on the repayment plans successfully. If not, the penalties and interest involved could further damage your financial stability, leaving you in a worse position than when you started. If you're having problems keeping up with your bills and your financial situation isn't likely to improve, don't delay the inevitable.

By filing for bankruptcy now, you may be able to save money and get back on your feet sooner than ever. Contact us today and arrange for a free initial case evaluation as soon as possible. We'll give you solid legal advice so that you know whether or not you should look at bankruptcy alternatives, or whether you should seek legal representation from a qualified Los Angeles County Bankruptcy Attorney.