{"id":2440,"date":"2015-12-01T09:43:47","date_gmt":"2015-12-01T17:43:47","guid":{"rendered":"https:\/\/pdxlegal.com\/?p=2440"},"modified":"2017-09-20T13:08:38","modified_gmt":"2017-09-20T20:08:38","slug":"alternatives-to-bankruptcy","status":"publish","type":"post","link":"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/","title":{"rendered":"Alternatives to Bankruptcy"},"content":{"rendered":"<h2><span class=\"ez-toc-section\" id=\"Consider_These_Alternatives_to_Bankruptcy_for_Different_Situations\"><\/span>Consider These Alternatives to Bankruptcy for Different Situations<span class=\"ez-toc-section-end\"><\/span><\/h2><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-6629dcdace525\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6629dcdace525\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#Consider_These_Alternatives_to_Bankruptcy_for_Different_Situations\" title=\"Consider These Alternatives to Bankruptcy for Different Situations\">Consider These Alternatives to Bankruptcy for Different Situations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#1_Payment_Plans_with_Multiple_Small_Creditors\" title=\"1. Payment Plans with Multiple Small Creditors\">1. Payment Plans with Multiple Small Creditors<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#2_Payment_Plans_with_One_Large_Creditor\" title=\"2. Payment Plans with One Large Creditor\">2. Payment Plans with One Large Creditor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#3_Negotiate_a_Lump_Sum_Payoff\" title=\"3. Negotiate a Lump Sum Payoff\">3. Negotiate a Lump Sum Payoff<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#4_Pay_Off_State_Taxes_Before_Federal_Taxes\" title=\"4. Pay Off State Taxes Before Federal Taxes\">4. Pay Off State Taxes Before Federal Taxes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#5_Reform_Your_Student_Loans\" title=\"5. Reform Your Student Loans\">5. Reform Your Student Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#6_Default_on_Your_Mortgage\" title=\"6. Default on Your Mortgage\">6. Default on Your Mortgage<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/pdxlegal.com\/alternatives-to-bankruptcy\/#Talk_to_an_Attorney_First\" title=\"Talk to an Attorney First\">Talk to an Attorney First<\/a><\/li><\/ul><\/nav><\/div>\n\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-2644 size-medium\" src=\"https:\/\/pdxlegal.com\/wp-content\/uploads\/2016\/03\/Portland-Bankruptcy-Lawyer-300x168.jpg\" alt=\"Bankruptcy text image\" width=\"300\" height=\"168\" srcset=\"https:\/\/pdxlegal.com\/wp-content\/uploads\/2016\/03\/Portland-Bankruptcy-Lawyer-300x168.jpg 300w, https:\/\/pdxlegal.com\/wp-content\/uploads\/2016\/03\/Portland-Bankruptcy-Lawyer-768x429.jpg 768w, https:\/\/pdxlegal.com\/wp-content\/uploads\/2016\/03\/Portland-Bankruptcy-Lawyer.jpg 864w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>The word \u201cbankruptcy\u201d has a lot of negative stigma attached to it, but usually is a reasonable solution for people with debt they can\u2019t afford to pay off. However, it\u2019s not always the best solution for every individual or business. Many factors go into the decision you will ultimately make, and a good bankruptcy attorney can help you put together a plan before you take action. Alternatives to bankruptcy generally (but not always) involve payment of the debt in full. Here are some alternatives that are useful to consider when trying to figure out the best way to get back on track financially:<\/p>\n<h2><span class=\"ez-toc-section\" id=\"1_Payment_Plans_with_Multiple_Small_Creditors\"><\/span>1. Payment Plans with Multiple Small Creditors<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When you owe debts to multiple creditors, a good strategy is to make minimal payments to all accounts and pay as much as you can (up to your budgeted total) to the smallest account until paid off.\u00a0 Then redirect those funds to the next smallest account and continue the process.\u00a0 For example, if you have ten accounts and can afford $100 then send $5 to nine of the accounts and $55 to the 10th\u00a0until it is paid off. \u00a0After that send $5 to the remaining 8 accounts and $60 to the 9th, etc.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"2_Payment_Plans_with_One_Large_Creditor\"><\/span>2. Payment Plans with One Large Creditor<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Try to negotiate a payment plan over time. Even if the creditor sues you, most creditors will agree to a payment plan. If you get sued, a creditor could garnish bank accounts and wages, so ask the creditor for a written \u201cCovenant Not to Execute\u201d in exchange for your commitment of timely payments. The covenant is their agreement NOT to garnish your wages and bank accounts while you make payments.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"3_Negotiate_a_Lump_Sum_Payoff\"><\/span>3. Negotiate a Lump Sum Payoff<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Most creditors will negotiate a lump sum payoff if the account has been charged off or is seriously past due.\u00a0 That lump sum payoff could be as low as 20% of the outstanding balance or could be as high as 75%.\u00a0 Keep in mind that if the amount not paid is more than $600 then the creditor will report this to the IRS and you may owe income tax on that forgiven amount.\u00a0 The best time to settle for a lump sum payoff is in March, June, September or December and understand that the creditor who accepts your offer is going to want the money immediately.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"4_Pay_Off_State_Taxes_Before_Federal_Taxes\"><\/span>4. Pay Off State Taxes Before Federal Taxes<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The Oregon Department of Revenue is much more aggressive than the IRS.\u00a0 If you owe both, pay down the state taxes as quickly as possible.\u00a0 Call the IRS to set up an \u201cInstallment Agreement\u201d but do NOT offer them a specific payment amount. Tell them you are struggling, and ask the agent for the minimum amount they will accept.\u00a0 You can always pay more, especially after you have paid off the state tax debt.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_Reform_Your_Student_Loans\"><\/span>5. Reform Your Student Loans<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If your student loans are in default it is possible to reform the student loans and get them back into good standing.\u00a0 Once in good standing you may qualify for one of the many income based repayment plans available.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"6_Default_on_Your_Mortgage\"><\/span>6. Default on Your Mortgage<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you do not qualify for a loan modification and cannot afford the home it is almost never a good idea to \u201cshort sell\u201d the property because this may result in taxable income to you of the amount not paid at closing.\u00a0 That being said, you still have a right to sell your home even if the lender has initiated a foreclosure against you.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Talk_to_an_Attorney_First\"><\/span>Talk to an Attorney First<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you\u2019re considering bankruptcy or plan on taking action with any of the above steps, talk to a bankruptcy attorney first. Many <a href=\"https:\/\/pdxlegal.com\/portland-bankruptcy-attorneys\/\">bankruptcy attorneys<\/a> will give you a free case evaluation where you can discuss your situation and put together a plan to pay off your debts. If you\u2019re in the Portland, Oregon area, feel free to <a href=\"https:\/\/pdxlegal.com\/contact\/\">schedule an appointment<\/a> with me, and I will point you in the right direction, whether you plan on filing for bankruptcy or not.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Consider These Alternatives to Bankruptcy for Different Situations The word \u201cbankruptcy\u201d has a lot of negative stigma attached to it, but usually is a reasonable solution for people with debt they can\u2019t afford to pay off. However, it\u2019s not always the best solution for every individual or business. Many factors go into the decision you [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[21,22],"_links":{"self":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/posts\/2440"}],"collection":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/comments?post=2440"}],"version-history":[{"count":0,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/posts\/2440\/revisions"}],"wp:attachment":[{"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/media?parent=2440"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/categories?post=2440"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pdxlegal.com\/wp-json\/wp\/v2\/tags?post=2440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}