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Debtor and Creditor Workouts
A debtor and creditor workout may be the best way to alleviate your debt and save you from bankruptcy.
Are you struggling under the weight of debt? If so, you may be considering bankruptcy, but you should also be aware of another possible option – a debtor and creditor workout.
A debtor and creditor workout, sometimes called a non-bankruptcy workout, is a debt modification mutually negotiated between you and your creditors. With the help of a skilled attorney, you may be able to obtain an agreement consisting of compositions and/or extensions.
- Composition – an agreement for your creditors to take a partial repayment of your debt.
- Extension – an agreement for your creditors to accept repayment of your debt over a longer period of time.
Some debtor and creditor workout agreements consist of both compositions and extensions, meaning that your creditors may agree to accept less money over more time in order to repay your debt.
In 2005, new bankruptcy laws went into effect making it more difficult to file a “fresh start” or Chapter 7 bankruptcy. As a result, a non-bankruptcy workout became the best solution for a greater number of people struggling with their debt.