Pierce & Shows, APLC

Is bankruptcy your only option?

When facing a rising tide of debt and with little means to stay afloat, most people assume their only recourse is bankruptcy. However, there are other ways to handle financial problems.

The chief way is a “workout” which means that you “work out” your debt with your creditors. You and your creditors can agree on a way to make payments without the stigma and legal hoops of a formal bankruptcy.

Reduction and composition

Negotiations for a workout can include a composition contract in which the amount your creditors agree you will pay is less than what is owed.

You can also negotiate an extension contract that lengthens the amount of time in which the creditors expect their debts to be paid.

Agreements can also include both compositions and extensions, depending on the tolerance of your creditors.

Workouts are contracts, so they must contain the basics of contracts including an offer, an acceptance of the offer and “consideration,” or the exchange of something of value.

Who can use a workout

Workouts can be arranged with one creditor, several creditors or all your creditors. Not all your creditors have to negotiate or agree to terms and those that don’t aren’t bound by any agreement between you and the others. These creditors can pursue debt collection in any other way they see fit.

Debtors who avoid bankruptcy via workouts can still file for bankruptcy at a future date, while some bankruptcy discharges prohibit you from seeking bankruptcy again.

Paying debt via a workout can also keep the bankruptcy from affecting your credit score, leaving it higher than it would if you pursued bankruptcy protection.

If proceeding via workout is something you would like to pursue, then a conversation with an experienced, qualified attorney is your next step.

No Comments

Leave a comment
Comment Information
Email Us

Offering A No-Obligation Initial Consultation

We invite you to reach out to us and schedule a consultation with one of our lawyers. The consultation is always free. We never charge anything until we establish a resolution that we agree on and is the best solution for you, your family and your situation.

Call our team today: 225-388-9574. You are also welcome to send us a confidential email.

Find The Help You Need

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Locations

601 Saint Joseph St.
Baton Rouge, LA 70802

Phone: 225-388-9574
Fax: 225-388-0081
Baton Rouge Law Office Map

214 South Burnside Ave
Suite 205
Gonzales, LA 70737

Phone: 225-388-9574
Fax: 225-388-0081
Map & Directions