Debt Restructuring Lawyer
Financial distress can happen to anyone. A sudden illness, accident, or poor management can lead to financial insolvency. When you can’t pay your bills, it’s hard to focus on anything else in life. The restructuring attorneys at O’Bryan Law Offices are ready to help you. We can help you with a debt management plan to help you manage your outstanding debt. Reorganizing debt can give you the help you need to get back on your feet and get back to enjoying your life. For more information about our legal services, call us today at (502) 400-4020 or schedule an appointment online with a consumer bankruptcy lawyer.
NOTE: O’Bryan Law Offices is not a debt restructuring company. We offer free consultations to individuals considering debt restructuring as a solution for their debt and advise them on the best course of action.
What Is Insolvency?
Insolvency happens when your liabilities outweigh your assets. If you are unable to pay your outstanding debts, you are considered insolvent. Insolvency can happen after a sudden job loss, unexpected illness, or from credit card debt. Nearly half of American households have credit card debt. Unlike other forms of debt, credit cards often have high interest rates that compound when you don’t pay the bill in full every month. Payment history has a large impact on your credit score, so insolvency can have a major impact. Insolvency can also lead to more serious financial situations like bankruptcy.
Insolvency vs. Bankruptcy
Bankruptcy and insolvency are not the same things, but being insolvent can quickly lead to bankruptcy. Bankruptcy is often the last resort for financial distress. Insolvency can sometimes be remedied with the help of an experienced restructuring attorney.
Financial Restructuring Explained
Financial restructuring is a process that allows debtors to take control of their financial situation. Depending on the type of debt, the restructuring may take different forms. Some examples of financial restructuring include a lower monthly payment, a lower interest rate, or even a debt reduction. Creditors will often negotiate your debts, but having someone with experience can prevent you from being taken advantage of. At O’Bryan Law Offices, we have the experience necessary to negotiate with creditors on your behalf. If you are having financial difficulties and struggling to make your monthly payments, call us today. We have an entire team of attorneys available and ready to help.
Debt Restructuring Process
The debt restructuring process may look different for everyone, depending on the type of debt. Debt relief options for credit cards may not be the same as the options available for auto loans or mortgages. You can rest assured that the qualified attorneys at O’Bryan Law Offices will explore all debt relief options available. We will handle all the communication with the lenders to negotiate your debt.
The process can begin as soon as you make your first no-obligation appointment.
Types of Debt Restructure
The most common type of debt restructuring is known as troubled debt restructuring. This is when the debtor has proof of financial hardship and the lender agrees to negotiate the debt. Debt restructuring (also known as loan modification) can take many forms, including:
- Lengthening the time of the loan
- Lowering the interest payments
- Lenient repayment terms
- Adding unpaid debt back to the principal balance and keeping the account current
- Writing off a portion of the debt
Another type of way to restructure debt is a debt for equity swap. While this is mainly used by major companies, homeowners can use the debt for equity swap method to refinance their mortgage for a lower amount. The mortgage lender receives an equity interest in the home after it’s sold. This allows homeowners to keep their home and have a lower monthly payment, but they will not be able to keep as much from the home sale.
Debt Consolidation vs. Debt Restructuring
Debt consolidation is often an option for people struggling to pay existing debt. Debt consolidation involves combining many small (and usually high interest) balances into a larger balance with a lower interest rate. Combining old debt into a new loan can mean lower monthly debt payments with more money going toward the principal balance. Debt consolidation is not the same as debt restructuring. Debt restructuring focuses more on negotiating the original debt with the lender. Debt restructuring is often a more affordable method for people with great financial hardship.
How a Restructuring Plan Can Help You Get Financial Freedom
When you have too much debt and not enough cash flow, the added stress of constant calls from creditors can be overwhelming. A restructuring plan can help you stay current with your accounts and prevent harassing phone calls. Debt restructuring can help you prevent filing for bankruptcy, but only if you make your repayments on time and keep a positive cash flow.
Contacting a skilled lawyer can help keep your head above water. Our attorneys are well-versed in debt restructuring deals, so you can trust that we’ll advise you of the best course of action for your specific situation.
Unfortunately, debt restructuring can have a few disadvantages as well. That’s why we always recommend filing for bankruptcy over debt restructuring or consolidation. Unlike other debt relief options, bankruptcy offers the legal protection of the automatic stay. This stay prevents creditor harassment, stops foreclosure, and gives filers many other benefits that their creditors must respect.
Disadvantages of Debt Restructuring
Debt restructuring may help you and your family in the short term, but it will not prevent financial trouble forever. Learning good credit habits and financial management is important. It can help prevent you from getting into significant financial distress. Debt restructuring may mean you pay off your outstanding debts for a longer period of time.
Debt restructuring can have a major impact on your financial records, including your credit score.
Can Restructuring Debt Affect My Credit Score?
Restructuring debt can affect your credit score for up to three years after the final payment is made on the account. This is often because most people are in default when they begin the debt restructuring process. Since payment history makes up a significant portion of your credit score (35%), missed or late payments can drop your score dramatically. Restructuring debt may have a negative impact on your credit score, but being sent to collections over unpaid debts can affect your credit, too. At least with restructuring, you have a solid plan for your debt and can easily explain your credit history to future creditors.
What a Debt Restructuring Lawyer Can Do For You
Working with a debt restructuring lawyer can give you the breathing room you need to make important financial decisions. At O’Bryan Law Offices, we pride ourselves on helping you stay in control of your finances. We can take over communication with your lenders to prevent dozens of harassing phone calls. Our attorneys can negotiate with lenders and craft the best possible outcome for you. In addition to debt restructuring, we also offer debt counseling and credit counseling advice, though not the courses themselves. Our team will support you as you complete your required financial management courses. We know that financial trouble can cause added stress and feelings of despair. Let us help you.
Considering Debt Restructuring? Contact the O’Bryan Law Offices Today
Trust someone with comprehensive knowledge of the financial system to help you. At the O’Bryan Law Offices, our board-certified attorneys focus on getting you back on your feet. We know that financial difficulty can be overwhelming and confusing. Our attorneys are ready to stand by your side every step of the way–that’s what makes us different. Unlike “debt relief” companies, we have extensive knowledge of the Bankruptcy Code and never make false promises.
Our entire team focuses on crafting the best legal strategy for you. Start with a free consultation by calling (502) 400-4020. We will go over your options and explore strategies to get you back to enjoying your life.