YOU HAVE 4 BASIC CHOICES
We offer the first two
In a Bankruptcy, you are simply saying that you want relief from the debts you owe and in return you will give up your assets. The assets are turned over to the trustee, the laws ensure that the trustee is not required to take basic clothing, furniture and car. The trustee realizes what he can for those assets available to your creditors and pays each creditor their share of the money received.
A proposal is made through a licensed insolvency trustee and the rules are very simple. You make an offer to your creditors to settle your debts. If accepted, all interest payments stop. The trustee prepares the paperwork and mails your offer to the creditors. The creditors then vote to decide whether they will accept what you are offering. You can offer full payment or less but the closer you are to paying your creditors in full, the more likely the will accept what you have offered.
The negotiating can be done by you or by someone on your behalf (eg. a lawyer). This is usually an approach used if you know your money situation will soon improve. For example, if you are receiving unemployment insurance and will be called back to work in 2 months. This method is simply asking the creditors to be patient and to lower or suspend your payments until your income improves. Creditors are often reasonable if you talk to them before you get too far behind in your payments.
If your credit history will still allow you access to credit, a consolidation loan can help you lower your payments by hopefully getting a lower interest rate than you are currently paying as well as spreading your payments over a longer period of time.Back