Alternatives to Bankruptcy in New Jersey
Is There a Way to Avoid Filing Bankruptcy? Monmouth County Bankruptcy Lawyer Explains
Bankruptcy is a beneficial way to stop foreclosure, discharge unsecured debt and gain a fresh financial start. However, every option for debt relief, including filing bankruptcy, has advantages and disadvantages.
It is essential to speak to an attorney who can review all options and help individuals and businesses decide the best path for their unique situation. In some cases, alternatives to avoid filing bankruptcy might provide the necessary relief for debtors throughout New Jersey.
Options to How to Avoid Foreclosure and Get Back on Track with a Mortgage
Bankruptcy has the ability to immediately stop foreclosure if a sheriff’s sale is forthcoming. This is not the only option for homeowners, especially if they reach out to a loan modification attorney or short sale attorney when they first realize they are having difficulty keeping up with mortgage payments and need to avoid foreclosure in NJ. Homeowners may also wish to explore:
- Loan Modification: The federal government has certain programs in place that are available to qualified applicants. These programs allow you to modify your mortgage to affordable rates and payment plans.
- Short Sale: This involves selling the house for the loan balance. A short sale attorney should be directly involved in this transaction for the benefit of the homeowner.
- Deed in Lieu of Foreclosure: This involves turning over the property to a buyer or the bank. In exchange, the bank will cancel the remaining balance on your loan.
Alternatives to Bankruptcy
If you are struggling to pay your credit card bills or other debts, bankruptcy can help. However, if you are hesitant to file for Chapter 7 or Chapter 13, there are bankruptcy alternatives you can consider. These include:
- Debt Consolidation. To consolidate your debts, you can take out an additional loan, preferably with a low interest rate, and use the money you borrow to pay off your other debts. You will not owe any less, but you will only have to worry about one payment each month. Plus, a lower interest rate means you could end up paying less overall.
- Credit Card Debt Transfer. If you are primarily struggling with credit card debt, you may be able to transfer your balances onto a card with lower interest. This is similar to debt consolidation, but make sure you read the fine print before signing up for new cards. Some will charge you an annual fee or raise your interest rates after a certain period of time.
- Debt Negotiation. In the end, your creditors want to be paid. They know that if you declare bankruptcy they might not get any money at all. As a result, you and your attorney may be able to negotiate with them for lower interest rates or payments. This can help you get your finances under control.
- Debt Settlement. With the help of a New Jersey bankruptcy attorney, you may be able to get your creditors to accept a lower lump sum payment in exchange for the forgiveness of your entire debt. However, debt settlement is usually only a good idea if you have just received an influx of cash, like an inheritance or bonus check. Also, be wary of debt settlement scams. Trust only a lawyer to help you.
Can Bankruptcy Help with Student Loan Debt Relief?
Student debt is different than any other kind of debt. You usually cannot discharge student debt in either Chapter 7 or Chapter 13 bankruptcy except in cases of undue hardship. An undue hardship generally means a medical hardship that makes ever paying back the student loan impossible.
However, if you cannot prove hardship, you may be able to request a forbearance on payment if you are unemployed. Different lenders have different policies concerning forbearance and deferment agreements. Still, many are willing to negotiate, although you may end up paying more in interest later. If forbearance does not work, a Chapter 13 bankruptcy can relieve you of other loans, making your student loan payments easier for you to meet once the bankruptcy process is complete.
Speak to a Manalapan Lawyer for Your Best Options to Avoid Filing Bankruptcy
Bankruptcy is the right choice for many individuals, married couples and businesses who are overwhelmed with debt. However, it is not the best option for everyone in all situations. If you are having trouble paying your home mortgage, a short sale attorney and real estate attorney can offer you different ideas to fix the situation without bankruptcy.
Our bankruptcy attorneys in Monmouth County NJ have a number of additional practice areas, including real estate, business law and loan modifications. We offer free initial consultations with no obligation. Fill out our online contact form to get started, or call us directly at (732) 358-2028 to get started.