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Category Archives: Debtor and Creditor Workouts
A debtor and creditor workout, or non-bankruptcy workout, is an agreement negotiated between you and your creditors on how to settle your debts without bankruptcy. This type of debt modification allows debtors to restructure part or all of their debt, while avoiding the disrepute of bankruptcy.
There are certainly situations where an individual or business is too far underwater to expect a workout to save them from bankruptcy. In these cases, attempting a workout would likely just waste time and delay the inevitable bankruptcy filing.
A debtor and creditor workout is a written agreement modifying the terms of repayment on a debt. Also called non-bankruptcy workouts, a debtor and creditor workout can provide debt relief in two ways: through compositions and extensions.
In simple terms, a debt workout is a negotiated, formal debt modification between all involved parties. Instead of filing for bankruptcy to ease a financial burden, all parties utilize a professional counselor (professional bankruptcy attorney) to help work out a solution agreed to by everyone.
No one want to file bankruptcy, no matter how bad it looks. Fortunately there are options. We always look at the option of a “workout” if possible. A “workout” is simply a negotiated agreement (out-of-court) between the debtor and the creditor for repayment of the debt held by the creditor.