| Bankruptcy Law - Questions & Answers
Are there alternatives
to bankruptcy?
Of course. Some people have successfully
managed their finances through nonprofit credit
counseling centers like Consumer Credit Counseling
Services of Greater Dallas, Inc. Among other services,
CCCS intervenes with creditors to set up more
manageable payment plans. Creditor participation
in CCCS payment plans is entirely voluntary. CCCS
cannot guarantee that a creditor will accept a
payment proposal or protect you from further collection
efforts.
Sometimes a payment plan can be negotiated directly
with a creditor. Obtaining loan extensions, compromises
and workout agreements require negotiation skills
and experience. These alternatives may alert your
creditors to the existence of nonexempt property
that the creditor could reach and can involve
considerable expenses.
You also have the option of doing
nothing, which may entail certain risks. Creditors
can obtain court judgments on the debt and then
attempt to collect the judgment. Texas law allows
creditors to satisfy their judgments out of the
debtor’s property, including bank accounts
and certain personal property. If you sell real
property other than your homestead after the judgment
is filed, you will most likely have to satisfy
the judgment out of the proceeds of the sale.
Judgment creditors cannot, however, foreclose
on your homestead to satisfy the judgment, and
they cannot garnish your wages.
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