Millions of Americans are facing major financial challenges today. Between rising inflation rates and the chaos of the economy, it’s easy to find yourself facing mounting debt. The good news is that there’s help available. A bankruptcy attorney can guide you through your options, and while Chapters 7 or 13 might be your ultimate choice, debt counseling may also be a viable option.
What Is Debt Counseling?
Debt counseling is an alternative to filing for bankruptcy. In this situation, you’ll work with your creditors to arrange for a structured repayment plan that allows you to pay down your debts without defaulting on them.
Why Consider Debt Counseling Instead of Bankruptcy?
Debt counseling and bankruptcy offer viable paths forward for anyone hoping to get a fresh financial start. However, they work differently. Why consider debt counseling over bankruptcy? Your attorney will help you determine which path is right for you, but some of the benefits include:
- Rebuilding your credit faster
- Reducing debt-related costs
- Boosting your financial stability
What’s the Attorney’s Role?
A bankruptcy attorney can help with all aspects of debt counseling.
Understanding Your Options
First, you’ll meet with your attorney, who will examine your debts, income, and overall financial situation. You’ll discuss important aspects, including any assets you might own, and then go over your options. Those will include debt counseling, Chapter 7 bankruptcy, and Chapter 13 bankruptcy.
Advice for Managing Debt
Second, your attorney will provide debt counseling services and advice on managing your debts. It’s always better to deal with your financial challenges directly, if possible, before filing for bankruptcy. Some of the things your attorney may work with you to implement include:
- Contacting creditors to arrange for reduced or rescheduled payments.
- Creating structured repayment plans.
- Making alternative payment arrangements, such as lower monthly payments made over longer periods.
- Creating a monthly budget based on your income and debts so you always know what you have to pay and when it’s due.
- Intervening with debt collectors to help put a stop to harassment or illegal behaviors and activities, such as contacting family and friends, or speaking with your employer.
- Work with you to create a financial solution that’s tailored to your needs and level of debt.
Deciding If Bankruptcy Is Right
In some cases, debt counseling may not be the best path forward. In these cases, bankruptcy can offer the clean break you need. Your bankruptcy attorney can explain the differences between Chapter 7 and Chapter 13 to help you determine which option suits your needs and future goals.
There’s Light at the End of the Tunnel
Struggling with debt can make it feel like the world has gone dark. There’s light at the end of the tunnel, though. There’s help and hope available through a compassionate bankruptcy attorney who can help you with debt counseling, as well as guide you to the right type of bankruptcy filing if that’s the better route for your needs.