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Can an attorney help with pre-bankruptcy filing strategies?

Are there non-bankruptcy alternatives that an attorney may suggest to a struggling debtor?  One such option may be a debt management plan, or DMP. Debt negotiation and consolidation may help reduce the burden of monthly payments.

Although it may sound counterintuitive, a bankruptcy attorney can be an ideal resource for consumers interested in exploring debt consolidation. The reason is that an attorney understands that there is a spectrum of options available to debtors. In some cases, consolidation may only serve to prolong an individual’s debt for several more years until it becomes unmanageable. In that situation, a bankruptcy filing may actually be the more realistic solution. 

Keep in mind that a debt reorganization company may have a financial stake in advising against a bankruptcy filing. An attorney can provide sound counsel without the misleading advertising advanced by such companies. At the same time, an attorney may also be able to negotiate with a creditor for a more manageable solution to a debt issue. The leverage in those negotiations is that a creditor might not recover anything if a consumer files for bankruptcy. With that incentive, a creditor might be more willing to negotiate. Debt consolidation companies, in contrast, may require several years of payments before they open negotiations with creditors.

Generally speaking, a bankruptcy filing will discharge unsecured debt. To understand the categories of debt you might have, consult with a bankruptcy attorney. An attorney can dispel the myths and negative hype that may surround bankruptcy. A filing really can offer a fresh start.

Source: FindLaw, “What is a Debt Management Plan (DMP)?” copyright 2015, Thomson Reuters

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  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
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Goldman & Beslow, LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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