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LA County Bankruptcy Alternatives

Exploring credit card negotiations, credit counseling and more

Many people are concerned that filing bankruptcy will ruin their credit. In fact, failure to pay one's creditors is what damages credit by lowering one's credit score. At the Law Offices of Hagen & Hagen, we advise our clients about all available alternatives to bankruptcy in California, including:

  • Do nothing. Without bankruptcy, creditors are free to take all legal actions necessary to collect their debts. Some creditors will take no action at all. Some creditors will sue and obtain judgments to establish liens against your property, garnish your wages, and levy your bank accounts.
  • Debt consolidation. There are numerous debt consolidation agencies. Consolidators attempt to get creditors to reduce interest rates, reduce monthly payments or reduce principal. For most debtors, consolidation will only provide moderate, short-term relief and is an inadequate long-term solution.
  • Debt negotiation. Debt negotiators often ask the debtor to deposit with them a sum equal to 50 to 60 percent of their debt. The negotiator will then seek from creditors an agreement to accept less than that amount. Any savings realized will belong to the negotiator as its fee. It's a win-win-win scenario.
    The problem is that most debtors are not able to pay 50 to 60 percent of their debt in cash. Negotiation makes sense only for debtors with existing unsecured debt problems, usually in the form of credit cards, who anticipate a large cash infusion such as an inheritance, work bonus, tax refund or family assistance.
  • Settle only with problem creditors. One possible alternative to bankruptcy is to dowse only the hottest fire, i.e., don't pay creditors until they sue, and then settle with such creditors one at a time. Hopefully, only a small percentage of the creditors will ultimately file suit.
  • Move to a foreign country. Although this may sound extreme, it may be an option for some people. Creditors are highly unlikely to pursue you in other countries.

Considering a San Fernando Valley loan modification? Attorney Hagen can advise

At the Law Offices of Hagen & Hagen, we can advise you about LA County bankruptcy alternatives, including loan modifications, credit counseling and other options. Call us at 818-305-6452 or contact our lawyer online.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.