Before you consider bankruptcy, you may want to explore “non-bankruptcy alternatives.” In the 2005 changes to the bankruptcy law you are now required to take a “credit counseling” course before you would be eligible to file bankruptcy. The Utah Law Office of Douglas L. Barrett, LLC can help direct you an approved Utah credit counseling provider. The fact remains, however, that need to determine what your debts are in order to determine what direction you should follow in your financial future. I find it helpful if you will make a list of the people you think you own money to prior to a consultation at my office.
Informal payment plans?
Once you know what you owe, you may want to create your own payment plan whereby you allocate portions of your disposable income to your various creditors. Your negotiating position improves if you can offer your creditors a lump sum payment. If you can get your creditors to agree to a payment plan, you should confirm your understanding in writing. As part of your agreement to pay, you should insist that negative credit references be removed when you finish paying your obligations.
Consumer Credit Counseling?
There are other “credit counseling services” you may see in the phone book, advertised on the radio or advertised through unsolicited mail. Some of these services offer to clear your credit file or to get you a new credit file. Usually, these organizations are rip-offs and you should avoid them. A good rule to follow is “if it sounds too good to be true, it probably is.” Check with the State of Utah Department of Consumer Affairs or the Utah Better Business Bureau to see if they have had any complaints registered against them.
Finally, you should realize that it will take a great deal of both discipline and money to pay off substantial credit card debt. For example, if you have $10,000 in credit card debt and you want to pay it off in two years, you will need to pay $520 per month; in three years, you will need $382 per month. If you wanted to pay off the $10,000 at $200 per month, it would take you over ten years. Credit card debt is especially stubborn to eliminate because of the high (19% to 29%) interest that keeps adding up. An experienced Utah consumer bankruptcy attorney can help you make the correct financial decision. Visit our website at www.utahchapter7.com .