NEGOTIATING WITH CREDITORS

Bankruptcy is a last resort option and should not be entered into without having already exhausted all other options.  Before you file for bankruptcy, you attempt to negotiate with your credit card company for a lower interest rate and/or lower payment options.  (Request a copy of our Bankruptcy book for example letters)

In order to achieve your goal, you must first gather all the necessary financial information.  You will need your balance sheet and income statement.  These documents demonstrate to creditors your financial situation and ability to repay.  Your balance sheet is a snapshot of your current assets (things of value that you own) and liabilities (debts that you owe).  Examples of assets are your house, cars, stocks, cash in your bank account, etc.  Examples of liabilities are mortgages, car loans, credit card balances, etc.  Your income statement shows your monthly budget (how much you made and spent last month).  This will demonstrate how much is coming in, how much is going out, and what is left over for payment.  Together these statements will provide the creditors with your current net worth.  Your net worth is your assets minus your liabilities (Assets – Liabilities = Net Worth).

Why should I go through all this effort?  How can this possibly help my situation?

If there is no money, there is no money.  Creditors are businesses and are interested in getting paid on the debt.  Creditors are more willing to settle the debt at a significant reduction if you can show them that you have a negative or no net worth.  Negotiating with your creditors cost you nothing but some time and effort.  You do not need to hire an attorney (not even our firm) in order to prepare these forms and send them to your creditors.  Try to help yourself before you hire our firm to file your bankruptcy petition.