4. Get Outside Help to Design a Repayment Plan
Many people aren’t well-equipped to negotiate with their creditors. Inside, they may feel that they are obliged to make full payment. Or, their creditors may be so hard-nosed that the process is too unpleasant
to stomach. And some people just haven’t honed their negotiation skills.
If you don’t want to negotiate with your creditors, there are people and organizations available to help you. Creditors are often more than happy to work with respected organizations that work with debtors who are serious about repaying their debts. Nonprofit credit and debt counseling agencies (see Appendix 1), the United Way or a church or synagogue are all excellent prospects. These organizations will help you figure out how much you owe, how much you can afford to pay each month and what your various options are—including bankruptcy. A credit or debt counseling agency will also talk to your creditors for you. Check your phone book’s Yellow Pages under Counseling.
Use caution with lawyers and credit repair clinics. A lawyer can help, but lawyers charge high fees which rarely are justified, especially when you’re heavily in debt. Whatever you do, don’t use a credit repair clinic. (See Chapter 6, Section G.)
5. File for Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the bankruptcy plan most people have heard about. It allows you to wipe out most consumer debts—credit cards, medical bills and the like. In exchange, however, you might have to surrender some of your property, such as a second car, valuable electronic equipment or a vacation home. To file, you fill out several forms that describe your property, your current income and expenses, your debts and any recent purchases and gifts. Then you file the forms with the federal bankruptcy court in your area.
Taken From : Credit Repair by Attorneys Robin Leonard and Deanne Loonin
