Boca Raton Bankruptcy Attorney

Workouts

Anyone who has ever been burdened with surmounting debt knows that it can often feel like there is no end to money woes. Bankruptcy is often a successful option that offers a structured plan for debtors to compensate their creditors. Before considering bankruptcy, there are other options that you may want to review such as participating in a workout.

What is a Workout?

A workout is a more formal, mutually-negotiated modification of debt that does not involve a bankruptcy filing. It helps establish an agreement worked out between the debtor and his or her creditors for payment of the debts between them. They can also be referred as compositions or extensions.

A composition is a contract between a debtor and two or more creditors who agree to take a partial payment in full satisfaction of their claims. An extension is a contract between a debtor and two or more creditors who agree to extend the time of payment for their claim.

The Law

Compositions and extensions are governed under the same laws. They are more subject to contract law principles than debtor-creditor rules. They are required to satisfy all formal requirements of contract formation.

Who is Required to Agree

A workout agreement must have one than one creditor participating. However, not all creditors that a debtor has must be involved.

If you or your spouse is facing mounting debt and unstable finances, considering a workout or bankruptcy may be your first step towards getting your monetary situation under control.

Speak with a Boca Raton Bankruptcy Lawyer

Contact the Boca Raton bankruptcy attorney of Eric N. Klein & Associates, P.A. at 561.353.2800 today.