Alternatives to Bankruptcy

Debt Consolidation/Debt Negotiation

Some people do not want to file for bankruptcy because they want to pay their creditors. They often choose to participate in widely advertised "debt consolidation" or "debt negotiation" programs.

Debt consolidators take a monthly payment from you and attempt to negotiate a better interest rate for you. Sometimes this works; sometimes it doesn't. Unfortunately, the companies that sponsor such programs are not subject to regulation. Sometimes they take your money, pay their own fees before making payments to your creditors and actually make your credit scores worse. Sometimes, they go out of business and consumers have no recourse.

Debt negotiators take a monthly payment from you and promise to negotiate discounts from your creditors. Dealing with these companies are subject to the same risks as with debt consolidators, plus there are additional risks: they don't tell you that you will receive a 1099 form from the lender for the discount and will have to pay income tax on the amount of the debt that is forgiven. Also, you will often find in the "fine print" that the fees taken by these parties (often law firms) will exhaust any savings you may have (e.g., they take an upfront fee from the first monthly payments you make before making any payments to your creditors, plus a percentage of the savings, measured by subtracting the negotiated settlement from the amount due at the time of the settlement — often years from when you hire them and start your monthly payments).

Our Unique Debt Settlement Trust

For those clients who (i) are not eligible for bankruptcy; (ii) should not file for bankruptcy because of risks that we have identified; or (iii) would prefer not to file for bankruptcy, we have developed a unique, highly successful Multi-Step Debt Settlement Program, not used by anyone else in the country. We have effectively used this program for high-income earners with substantial assets yet substantial unsecured debt. It can also be used by anyone who has access to a lump-sum that can be used to negotiate with creditors, but who does not want those funds to be at risk in their own bank account.

Chapter 13 Repayment Plans

The best way to protect your funds and obtain time to pay is often to use a court-supervised repayment program known as Chapter 13 bankruptcy. The bankruptcy trustee receives a 10 percent commission for administering this program, is bonded, and subject to supervision of the U.S. Bankruptcy Court and the U.S. Department of Justice. Repayment programs can last as long as five years, and carry no interest, penalties or hidden fees. During this period your creditors are prohibited from harassing you, and you are free to immediately start rebuilding your credit history.

Bankruptcy Is Not Always a Good Idea

Bankruptcy is not always a wise choice. Only a highly experienced bankruptcy attorney can evaluate your individual situation. If we determine that bankruptcy is not the best option for you, we will assist you in developing a non-bankruptcy strategy for dealing with your financial problems. Sometimes this involves negotiating settlements with your creditors; sometimes it involves explaining the risks and benefits of competing strategies.

Most clients, having experienced the abrasive conduct of debt collectors, do not understand the rights and protections that they have under federal and state law. We will work with you so you fully understand your rights and help you act accordingly.

Non-Bankruptcy Survival Strategies

Sometimes the best approach is to deal with reality, as best you can. Our unique experience in protecting clients by using bankruptcy tools provides us with special insights from which we have developed strategies for dealing with outstanding debt without filing for bankruptcy.

Contact Our Staten Island Attorneys for Debt Relief Help

If you are overwhelmed by debt, our lawyers can help determine the debt relief option that is right for you. Contact us online or call 718-442-4424 to schedule an appointment to discuss your situation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.