Should You Negotiate with Creditors Before Filing Chapter 13?
Filing for Chapter 13 bankruptcy is a big step. Chances are, you'll spend weeks, months, or even years weighing the decision before moving forward. Before you do, though, you may wonder if contacting creditors to negotiate a more affordable payment structure can help. In some cases, it is, but not always, making it important to look at all the factors first.
The Craig Black Law Firm fully understands the Chapter 13 process and can advise you on your options. I take a personal approach to each client relationship, and for that reason, when you call my office at 678-888-1778, you'll speak to me directly. You can also get in touch with me by completing my confidential contact form.
Potential Benefits of Negotiating with Creditors
Negotiating with creditors takes time, but it can be well worth it for some. Here are some benefits that may have you considering negotiating rather than filing for bankruptcy:
- Protecting your credit score: Bankruptcy filings stay on your credit report for up to seven years while also dropping your score. Negotiating with creditors will eliminate that hit and may even help if you can start making on-time payments consistently.
- Reducing debt amounts: With Chapter 13, you'll be on a repayment plan, so you'll need to pay back some of the debt, anyway. Negotiating with creditors could reduce your repayment amount if you do decide to file.
- Lowering interest rates and fees: In addition to reducing what you owe overall, you may be able to eliminate or reduce fees and lower interest rates.
- Reducing legal hassle: Bankruptcy filings require you to complete paperwork and meet with your trustee. In some cases, negotiating with creditors can happen in one quick phone call, saving you time and effort.
When Negotiating Might Not Be the Best Option
Negotiating can work for some, but for others, filing for bankruptcy is a better option. If your debt burden is overwhelming and reducing payment amounts won't help, negotiating with creditors likely won't make your debt manageable or even make a big dent in your repayment plan if you do file.
Your legal situation could be another determining factor. If you have wage garnishments or constant incoming calls from collection agencies, the automatic stay provided by a Chapter 13 bankruptcy filing could be exactly what you need.
How the Craig Black Law Firm Can Help
Every Chapter 13 case is different, which is why the Craig Black Law Firm works one-on-one with each client to determine exactly the best approach. If you're considering filing for bankruptcy, I can take a look at your situation and help you decide whether filing or negotiating with creditors is the best route.
Negotiating with creditors could be a way to reduce your repayment amount or avoid Chapter 13 altogether, but it isn't always the best option. Give me a call today at 678-888-1778 or complete this confidential form, and I'll reach out to you.