Under some circumstances we recommend our clients to negotiate with a creditor before filing for bankruptcy. This makes sense when all or most of the debt is owed to one creditor or if your inability to pay is only short term. You must be careful when you negotiate with a creditor since creditors try find out about your assets when you call them to negotiate. It makes sense to ask a bankruptcy attorney for assistance in negotiating your debt down.

Credit consolidation agencies may make sense in certain situations. If your debt is substantial or you have many different creditors a credit consolidation agency typically is not able to improve your situation by much. You will be required to pay a fee to the credit consolidation company which in many cases amounts to $1000.00 or more per month and creditors will still call and harass you since no formal stop to collection activities has been mandated.

If all or most of your debt is owed to one creditor and repayment of some of it is possible then a formal repayment agreement with the creditor negotiated by a bankruptcy lawyer can be advantageous. Creditors often are more willing to work out a repayment agreement with a bankruptcy lawyer knowing that if they do not cooperate, the client will probably resort to bankruptcy under which circumstance the creditor would not see any of its money.

Remember that your negotiation with the creditors can backfire if it may notify the creditor of your nonexempt assets that the creditor may take from you through a law suit.

If you have multiple creditors and it does not seem that you will be able pay of your debt in the near future bankruptcy often is the best way to solve your financial problems and get a fresh start without creditors.

No matter what the best path is to solve your financial problems the attorney will look at all possible avenues and give you an honest opinion.