Jeffrey B. Irby
What Alternatives Should I Consider Before Declaring Bankruptcy?
When faced with financial crisis, many people make the mistake of assuming bankruptcy is their best — or only — option to remedy their problems. While bankruptcy is sometimes the eventual result, it may not be necessary. I’m here to both break down bankruptcy and present some possible alternatives you may be able to take advantage of in your effort to get your finances back on the right track.
Bankruptcy typically becomes an option when an individual or business ends up in such a large amount of debt that they are unable to dig their way out, resulting in the selling off of assets to eliminate their debt. Bankruptcy for individuals can be divided into two categories:
- Chapter 7 Bankruptcy — This is the more traditional form of bankruptcy, involving surrendering your assets and property to pay off your debts to creditors. After giving up your assets and property, you are permanently relieved of your outstanding debt. However, eligibility for Chapter 7 filing is income-based. If your income is not low enough, you will instead have to file Chapter 13 bankruptcy.
- Chapter 13 Bankruptcy — This option of bankruptcy involves setting up a payment plan to pay down your debt, rather than eliminate it entirely in one motion. This can be accomplished by either eliminating a portion of your debt and leaving you with more manageable payments, or by structuring your debt payments in a way that will make paying down the debt more easily achievable.
Facing the possibility of filing for bankruptcy can feel discouraging, but if you’re in a deep financial hole, you need to know that bankruptcy may not necessarily be your only option. There are alternatives.
Alternatives to Bankruptcy
Before making the decision to file for personal bankruptcy, here are a couple of alternatives I want my clients to consider:
- Negotiate with Your Creditors — Some creditors are willing to work with you on your debt
- Sell Off Assets — Selling off an extra car or downsizing your home can relieve debt
- Credit Counseling Services — There are services available to help you manage your debt
It is my preference to avoid having my clients file for bankruptcy unless they have at least $10,000 in unsecured debt. If your debt is less than $10,000, I would likely advise you that filing for bankruptcy is not in your best interest.
For my clients, I offer something no other bankruptcy attorney in the northern Alabama area will offer — free access to an online course called 7 Steps to a 720 Credit Score. This course provides you with education on how to deal with your debt and improve your credit to receive lower interest rates moving forward. This course normally costs $1,000, but I provide it to my clients for FREE. This can be a tremendously valuable tool to take advantage of when looking to get your life back financially.
Why You Need a Bankruptcy Attorney
In 2018, the state of Alabama had the highest bankruptcy filing rate in the country — 542.8 for every 100,000 residents. That’s a lot of our fellow Alabama residents who find themselves in deep financial trouble. Filing for bankruptcy may be the eventual best course of action, but there may be other options for you. When you find yourself in what feels like a bottomless financial pit, you need the help of a skilled attorney you can trust. Whether you decide to file for bankruptcy or choose to go another route, I can help you chart the right course.
Bankruptcy Attorney in Huntsville, Alabama
As a Huntsville-based bankruptcy attorney, I spend a lot of my time meeting with people who have found themselves in very serious financial situations for one reason or another. If you find yourself confronted with the prospect of having to file for bankruptcy, don’t feel like you’re out of options or without help. I can be right there with you to take you through the process step by step. Don’t lose hope — put a dedicated bankruptcy attorney on your side. If you need legal advice regarding your financial situation, call me, Jeffrey B. Irby, P.C., and schedule your free consultation at my Huntsville office today.