Bankruptcy Alternatives


For a large number of people, bankruptcy is the best and only alternative for getting out of debt once their financial situations have passed the point of no return. However, for many in Georgia, their financial conditions are not as bad as they initially appear. After consulting with a bankruptcy attorney and knowledgeable financial experts, you may very well find that your financial situation is such that you could use a less intrusive form of bankruptcy — Chapter 13, usually — or even avoid bankruptcy altogether.

There are several methods a consumer debtor can use to deal with debt short of liquidation bankruptcy:

  • Loan modification — Bankruptcy affects more than just the person filing for it. Creditors can also expect to lose out when one of their debtors is pushed to bankruptcy. That is why it makes sense for creditors to negotiate to avoid this result in borderline cases. With proper incentive, some creditors may waive penalties, reduce interest rates or even offer temporary forbearance to avoid foreclosure and bankruptcy.

  • Debt consolidation — While it is not the magic bullet that some organizations claim, consolidating debt or shifting debt from high-interest revolving credit to low-interest secured credit can drastically reduce interest rates if done properly.

  • Chapter 13 — Even if bankruptcy turns out to be unavoidable, individuals with a regular monthly income often have the option of managing and restructuring their debts under Chapter 13 without having to turn over and sell any of their property.