People’s financial situations naturally change as they grow and evolve. Some achieve financial freedom, while others plunge into a prolonged financial crisis. For many who experience prolonged financial crisis, filing for bankruptcy is the only option they see fit without even considering talking to an attorney. While filing for bankruptcy may be an easy way out of this stressful debt, this comes with downsides.

Filling for bankruptcy can be embarrassing and may prevent you from getting credit in the future. That’s why many financially savvy individuals avoid filing for bankruptcy and instead, solicit the services of a debt restructuring attorney to help them get out of financial distress.

If you’re experiencing prolonged financial distress, worry no more. Our attorneys often advise against filing for bankruptcy and instead tell you to consider debt restructuring. We believe that every individual’s financial situation is unique, and so we will evaluate your situation to determine if debt restructuring is the best option for you.

What is Individual Debt Restructuring?

Individual debt restructuring is an out-of-court debt relief option that helps individuals pay off their existing loans or get rid of credit card debt without affecting their credit rating. As the name suggests, debt restructuring involves sitting down with the creditor and restructuring the loan debt in such a way that it’s easier and convenient for you to repay.

This may involve reducing the number of monthly payments, reducing the principal amount or reducing the interest amount to be paid. In many cases, the creditor ends up receiving a lower amount after full loan repayment.

However, individual debt restructuring arrangements also come with some a downside, which you need to know in order to make an informed decision. For individuals who find themselves in financial distress, or who have poor credit scores, it can be a challenge to get a debt restructuring loan at an affordable interest rate. That’s because some debt restructuring agencies slap high-interest rates on such loans because these individuals are deemed, high-risk lenders.

Many people fail to do their due diligence and only focus on reducing their monthly payments. That’s why they end up taking these high-interest rate debt restructuring loans and end up paying a lot more in the end. Many financially-distressed individuals dodge these pitfalls by soliciting the services of a knowledgeable debt restructuring attorney to negotiate the debt repayment terms with the creditors.

How Individual Debt Restructuring Attorneys can help you with Debt Restructuring

Debt restructuring attorneys know that these financial transactions are time-sensitive. That’s why they respond to clients’ problems and concerns promptly. They work to provide creative, effective and proactive solutions in these fast-paced environments.

They have extensive experience and expertise in handling individual debt restructuring cases for lenders and borrowers.

A debt restructuring attorney can represent a borrower or a creditor. Here’s how:

  • Borrower

When a debt restructuring attorney is representing a borrower, his or her main aim is to sit down with the lender to negotiate debt terms that align with the borrower’s financial capability. Although finding a solution that fits both parties is a challenging task, especially in the present day’s economic environment, our debt restructuring attorneys think harder to find solutions that please both parties. Ideally, the attorneys try to find solutions that prevent the lender from going bankrupt and work to reduce time and expense for both parties.

  • Creditors

When a debt restructuring attorney is representing a creditor, his or her main aim is to find solutions that will produce the highest debt recovery. They will evaluate the implications of possible bankruptcy and look at borrowers’ past financial activities in order to come up with the best solution for creditors while considering both long-term and short-term repercussions. Most creditors give in to the wishes of the lender, but they demand certain concessions for making that sacrifice.

Types of Individual Debt Restructuring

There are two types of debt restructuring:

  • General debt restructuring: With general debt restructuring, the creditor or lender doesn’t incur any losses in the new debt repayment agreement. They may choose to reduce the interest rate or extend the debt repayment period to allow the borrower to recover from temporary financial distress and repay the debt at a later period.
  • Troubled debt restructuring: With troubled debt restructuring, the creditor or lender incurs losses in the new debt repayment agreement. Ideally, the negotiations result in a reduction in the total interest or a reduction in the value of the collateral.

Advantages of Debt Restructuring

  • Lower interest payments

A debt restructuring attorney’s main aim is to enable the lender to pay less than the actual debt amount. Therefore, they sit down with the lender and convince them to accept losses by reducing the interest rate for the loan to enable the lender to be able to pay the loan. Therefore, the lender rips the greatest benefit from this arrangement.

  • Helps individuals to avoid bankruptcy

Bankruptcy not only erodes your self-esteem but also prevents you from accessing any loans in the future. That’s why it’s a good idea to avoid it at all costs. Our debt restructuring attorneys can help you avoid bankruptcy cost-effectively by helping you negotiate a favorable debt repayment plan with your lender.

  • Increased debt repayment schedule

When you’re facing bankruptcy, the lender is more than willing to negotiate a debt restructuring instead of going through the trouble of repossessing your assets and selling them. In fact, the lender may end up with less money than the original debt. That’s why they will gladly allow an extension of the debt repayment period to allow you to conveniently pay your debt.

  • Prevents you from plunging further into debt

Debt restructuring does not involve taking out new loans. This helps protect you from accumulating more debt. It also cushions your credit score.

  • You get helpful support

Support systems are crucial during periods of financial distress. Besides providing debt restructuring services, debt restructuring attorneys or agencies provide helpful support throughout the process. Specifically, they provide educational resources and helpful tools that teach you how to manage your finances and stay away from debt. They are also available around the clock and you can call, email or live chat with their customer support in case you need something. In fact, our agency offers free consultation services on your case details.

  • Reduces Stress

The prospect of bankruptcy can stress you out. In fact, statistics show that many have gone into depression or taken their lives because of debt. A debt restructuring attorney will help you negotiate favorable loan payment terms, which will give you peace of mind and help you ease stress.

Why you should hire a Debt Restructuring Attorney to ease your Financial Stress

While you can negotiate your own debt restructuring, it’s far more beneficial to hire an attorney to do it for you. Here are the reasons why:

  • Extensive experience and expertise

A debt restructuring attorney has a wide experience and expertise in debt restructuring work. That means they have undergone the necessary training and taken up many such cases to ensure you end up with a satisfactory outcome. While most lenders will agree to restructure your loan, they would want to get the most out of the arrangement, considering you’re now a high-risk borrower to them. They will, therefore, want to increase the loan interest rate. Our debt restructuring attorneys know how to arm-twist creditors into accepting your new loan repayment terms.

  • Saves you time and money

Debt restructuring negotiation is a time-consuming and energy-draining process. And if you don’t have knowledge of the domain, it can take longer to reach an agreement. A debt restructuring attorney will take up all those tasks to allow you to focus on running your business. They also know the tricks to expedite the debt restructuring process and negotiations, thereby saving you a ton of time and money.

  • Organize a sit down with you

A debt restructuring attorney will organize a sit down with you to discuss your options. They will evaluate your financial situation and advice on whether you should go for debt restructuring or file for bankruptcy. Most debt settlement companies will just want to convince you to hire them to settle your debt without offering any value.

  • A debt restructuring attorney will defend you in case the lender goes against the agreed terms

A lender or creditor may go against the agreed arrangement in a bid to collect their debt quickly. A debt restructuring attorney will take the creditor to task about the issue in order to protect you. They will advise you on how to deal with the situation or do it themselves.

  • Prevents a creditor from taking advantage of your financial situation

It’s not advisable to go into a debt restructuring negotiation with a lender by yourself because they might try to take advantage of your financial situation. When you’re financially stressed out, you might be tempted to give in to their demands, which could cost you more money in the long run. Besides having an experienced and knowledgeable partner, a debt restructuring attorney will represent your interests without fear or favor.