Are there alternatives to a chapter 7 or 13 bankruptcy?

 A. You may wish to look into a debt consolidation loan or Consumer Credit Counseling.  But watch out for Debt Relief Scams.

A debt consolidation loan would require you to get a loan to pay off several of your debts. What you would be attempting to do is to reduce the total amount of your budget to an amount equal to your monthly income. 

If all you are able to do is to reduce your total monthly outgo to a point which is higher than your net monthly income then this method will fail. You will be tempted to use your real estate as collateral on a debt consolidation loan. This is because you are currently being inundated with radio and TV advertisements to use the “equity” in your home as security for a debt consolidation loan. Most finance companies will even give you 125% of the value of your home in the form of a loan. 

This is a trap for the unwary! Before you try to use your home as security for a debt consolidation loan check with our office or a credit counselor. You may lock yourself into a trap. Whether you try a debt consolidation loan or Consumer Credit Counseling as an alternative to bankruptcy, please explore all of your alternatives before you choose one of these methods; especially a debt consolidation loan secured with your home.

Another alternative is budget or credit counseling. If you think such counseling would help, you should contact the Consumer Credit Counseling Service in your area.  An other is a debt consolidation loan.   Attorney Bodor will explain these options to you at your conference with him.