There are instances where bankruptcy might not be the best option to handle a Florida resident’s financial problems. In those cases, other debt relief options might work better under the circumstances. For instance, a workout might be possible, which could achieve the same results as a bankruptcy.
A workout is a repayment agreement that is negotiated and voluntarily entered into by you and your creditors. One of the major benefits of a workout is that both you and your creditors can avoid the procedural requirements of a bankruptcy. Furthermore, you still have the right to file for bankruptcy if necessary since there are restrictions on how often consumers may file each chapter.
Many workouts have elements of composition and/or extension. When two or more of your creditors agree to accept less than full payment on a debt, you are entering into a composition contract. If you are given more time to pay a debt, you were more than likely given an extension of the existing contract between you and a creditor.
An agreement with a particular creditor could contain both a composition and an extension. However, creditors are not obligated to provide either relief to you. Your creditors might also agree to an assignment of certain property that will be liquidated to pay your debts.
The negotiations that are often required in order for a workout to succeed should not be undertaken without the guidance and assistance of a Florida attorney who is familiar with alternative debt relief options. Being represented by an attorney will help increase the likelihood that your creditors will be willing to enter into such an agreement. Furthermore, you might receive better compositions and extensions with representation than you would going it alone.