Bankruptcy Consideration Letter

A Bankruptcy Consideration Letter is a written communication from a debtor or their representative to a creditor or debt collector, informing them that the debtor is considering filing for bankruptcy protection as a means of resolving their outstanding debts, including the debt owed to the creditor. The letter typically includes details about the debtor’s financial situation, such as their income, expenses, assets, and liabilities, as well as the specific type of bankruptcy they are considering (such as Chapter 7 or Chapter 13). The letter may also include a request for the creditor to consider alternative repayment or settlement options, in order to avoid the need for bankruptcy and its potential negative consequences for both parties. The purpose of a Bankruptcy Consideration Letter is to provide the creditor with notice of the debtor’s intent and to encourage them to engage in good faith negotiations to resolve the debt outside of bankruptcy. The letter should be sent in a timely manner, before any bankruptcy filing, and may be subject to specific legal or procedural requirements.