Legal Steps to Managing Debt Resolution

Times are getting tight and you wonder whether you should file for bankruptcy. Some people say this is the best route to follow; others disagree. Before you file, consider all your options.

Choosing to File for Bankruptcy

Bankruptcy is a really tough decision, but sometimes it is the only one. People get into extreme debt due to various circumstances, ranging from poor choices to health crisis. Sometimes the hole is too deep. This is when you might want to consider filing for bankruptcy.

When you file for Chapter 7, all collection activities cease. If you file for Chapters 11 or 13, then you can keep your property, but you have to pay back some of your debts over the next three to five years. The negative aspect of this route is that it destroys your credit score.

Ways to Avoid Bankruptcy

There are various methods of obtaining bankruptcy help if you want to save your credit score or just feel strongly about repaying the debt you owe.

  • Credit counseling. Credit counseling is a process in which a debtor works with experts and creates a debt management plan and a budget to pay off bills in a reasonable manner.
  • Debt consolidation. This is a process in which the debtor takes out a single loan to pay off all other loans. The benefit of this method is that it often lowers interest rates.
  • Debt settlement (debt negotiation, credit settlement, and debt arbitration). This is a process in which the debtor and the creditor agree on a lower balance, which the debtor pays in full.

In tough times, it’s important to understand the legal ways you can manage debt resolution. Bankruptcy help is available for those looking for options.

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How to Legally Avoid Bankruptcy

When economic times are tough, it’s hard for both individuals and businesses to keep up with their finances. When finances spiral out of control and it seems as if you just can’t get out from under the debt, many turn to bankruptcy as the answer. Fortunately, however, you can legally avoid bankruptcy by turning to other resources and taking matters into your own hand.

Legal Help

One of the primary resources to turn to for help in avoiding bankruptcy is a bankruptcy attorney. You should turn to an attorney that specializes in bankruptcy for your area, so if you live in Los Angeles then you should look for Los Angeles bankruptcy lawyers to help. The benefit of working with a bankruptcy attorney is that they already know the bankruptcy laws and loopholes they can use to help you avoid having to file for bankruptcy. The drawback is that there are legal fees involved in enlisting the help of attorney, but it is typically an investment in your financial future that pays off in the long-term.

Consolidate and Restructure Debt

Debt consolidation companies and credit counselors can also assist you in regaining control of your finances. These are other sets of professionals that can help you to avoid having to file for bankruptcy. These professionals too often charge a fee for their services, but if you do not have the ability to consolidate and restructure your debt on your own, then working with one of these professionals can also save you from a bankruptcy.

Legal and debt professionals are your two primary resources for legally avoiding bankruptcy. You can also depend on yourself, if you acquire the knowledge to go it alone.

 

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Can Bankruptcy Improve Ethiopia’s Situation?

National Small Business Week Day 1
Image by ShashiBellamkonda via Flickr

In Ethiopia, the commerce industry is still growing. There are opportunities for this economy to improve, but in order for that to occur, many believe there need to be more opportunity for small business owners. Outside businesses are coming into the country and establishing themselves, but those who live in the country also need the opportunity to expand and grow successfully without the risks involved.

Bankruptcy in Ethiopia is quite untested. The country does have a bankruptcy code in place, which is much like the Swiss code, but the laws of this bankruptcy code have been mostly untested by those who live and work here. The reasoning is simple.

Bankruptcy not only carries a financial stigma to it, but it is also frowned upon by the government and within social networks. Unlike in the United States, consumers and business owners are less likely to file bankruptcy because of these implications.

In Ethiopia, bankruptcy is being used but limitedly. When it is used, it is only used for liquidation of debts, where all assets are sold to repay debts. However, by putting reorganization options into place, the country could see more people able to overcome the financial challenges they face.

Could bankruptcy offer help? In a country that is struggling to get a foothold on its overall economy, the option of using bankruptcy could help to benefit the business owner who is considering his options. If a small business owner has the means to file bankruptcy, that business owner may be able to remain in business even during difficult times. Obtaining credit after bankruptcy may still be an option for the individual.

Ethiopia’s economic industries are building. In order for the country to move towards privatization of these businesses, and the encouragement for citizens to build this industry, it may be necessary to work towards reducing some of the stigma and risk that is associated with filing bankruptcy.

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Filed Under: Business, Economy, Ethiopia Tagged With: , , , , , , ,