Many people in Minnesota are struggling with debt, facing foreclosure, repossession, or bankruptcy. If you are struggling financially, you should know there are options. There are alternatives to filing for bankruptcy.
Avoid Debt Relief Scams
There are a number of debt relief scams, seeking to take advantage of vulnerable people who need help. The scammers can often be found on late-night television commercials or online. If you are going to seek help, use a credible, trustworthy source.
Minnesota Debt Relief Options
There are a number of options for those who are overwhelmed with debt. If you are considering bankruptcy, you should consider Minnesota bankruptcy alternatives to determine which course is best for you. Here are a few of the options available:
1. Your Home: Deed in Lieu of Foreclosure, Short-Sale, & Foreclosure
If you are unable to pay your home mortgage, you face two risks: you will lose your home to foreclosure and you will owe the remaining amount on the mortgage plus all the fees (legal fees, etc.) resulting from the foreclosure.
Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is selling your home to the lender instead of waiting for the lender to foreclose on your home. If you do a deed in lieu of foreclosure, you need to be sure that you get in writing that you will not be liable for the remaining balance on any mortgages on your property. A Minnesota foreclosure attorney should represent you in this process to ensure you are fully released from all liability related to your mortgages.
A short sale is selling your home for less than the amount you owe on the mortgage(s). If you do a short sale, be sure that you obtain, in writing, a release stating that you will not be liable for the remaining balance on any mortgages on your property. A Minnesota real estate attorney should represent you in this process to ensure you are fully released from all liability related to your mortgages.
Foreclosure is the lender selling your home at a sheriff’s sale. There are type types of foreclosures in Minnesota: (1) foreclosure by advertisement and (2) foreclosure by action. If your home is sold in a foreclosure by advertisement, you will not owe the mortgage company that initiated the foreclosure, but if there is a second mortgage, you will owe the lender for the second mortgage. If your home is sold in a foreclosure by action, you will owe the remaining balance on the mortgage plus foreclosure fees (including significant attorney’s fees). This article explains much more detail about Minnesota foreclosures. To determine your legal rights and risks in a foreclosure, you should contact a Minnesota foreclosure attorney.
2. Your Credit Cards
Negotiation with credit card companies can sometimes result in great results. We routinely see balances cut in half. Of course, there is a catch.
First, credit card negotiation is normally only successful for those who are at risk of filing for bankruptcy, because credit card companies would rather get some money than none at all.
Second, credit card companies will not reduce the amount owed unless you will immediately pay that amount (a lump sum), because credit card companies won’t reduce your debt unless they get something for it. This means you need to have some money to reduce this credit card debt.
3. Your Other Debts
Like your credit cards, your other debts can often be reduced because creditors (those to whom you owe money) may be willing to accept cash in exchange for reducing your total debt because they are worried they won’t get paid at all if you file for bankruptcy or otherwise fail to ever pay them.
Who Should Negotiate Your Debts?
There is no harm in you trying to negotiate directly with your creditors to reduce your debt in exchange for paying them cash. However, keep in mind that they are professionals who will use professional collection tactics to get more money. They will try to get you to make payments on your debt by reducing the amount you must pay each month, but without reducing the overall debt. Their goal is to get your money quickly, and as much as possible, without regard to your interests. For these reasons, negotiation may be more effective done by an attorney.
There is a little more credibility when a Minnesota bankruptcy attorney tells a creditor that a person will have to file for bankruptcy if the creditor doesn’t agree to a reasonable deal. The creditor knows that the bankruptcy attorney is admitted to the federal bankruptcy court and by filing bankruptcy papers, the attorney can trigger bankruptcy protections for you. This can have a persuasive effect on creditors, helping them see that if they do not agree to reasonable terms, they may get much less if you file for bankruptcy.
Obtaining Debt Relief in Minnesota
It can be difficult to consider all of your debt relief options. Sometimes, it helps to talk with a professional who can analyze your situation, explain your debt relief options, and help determine which options are best for you.