Iowa Bankruptcy Guide

Chapter VII - Iowa Bankruptcy Alternatives

Consumer Credit

In my opinion, consumer credit is usually the best alternative to filing bankruptcy. Consumer Credit of Des Moines seems like the most reliable, trustworthy agency. If you are interested you should contact them and see if you are eligible. If so, and you like the terms, great; give it a try. You can always go back and file bankruptcy later. Of course, some people simply do not have enough extra income to pay even a modest payment to consumer credit and will go straight to bankruptcy. But if you are on the fence, it is probably better to at least contact them and find out what they can do. If you do file bankruptcy later you will probably feel better about your decision having considered that option.

Beware of Debt Settlement Companies

Unlike Consumer Credit of Des Moines a local non-profit agency with a good reputation, most debt settlement companies are distant, non-profit in name only and often rip off hapless consumers. They claim to be willing to settle your debt for 50% on the dollar. They take their fees up front and often you are being sued and your wages garnished before they settle any debt. Most debtors never get any money back from these agencies because they are out of state and the costs of suing and collecting is prohibitive.

Second Mortgage

Ever wonder why we are bombarded with offers from banks to take out a second mortgage? They even tell you to take out a loan and pay off your credit cards. This is because they know your credit cards can be discharged in bankruptcy while mortgage debt cannot; unless you give up your home. So it is very dangerous to take out a second mortgage to pay off dischargeable debt.

Inertia

Doing nothing is actually the most common response to financial trouble. We are all human and want to avoid unpleasantness as long as possible. Unfortunately many bad things can happen while we are doing nothing; calls and home and work, lawsuits, garnishment of bank accounts and checks etc. I have had many new bankruptcy clients who have had to cancel their appointment with me because they waited until the credit card companies were taking money from their bank account and they no longer even had the money to pay for their bankruptcy.