Should You Choose Bankruptcy or Consumer Credit Counseling?
Sunday, December 6th, 2009 Subscribe To Our Feed
Are you interested in credit consolidation? If you’re carrying a lot of debt, you owe it to yourself to be. Today’s challenging and turbulent economy is causing consumer debt to rise. Too much debt can obviously make life very difficult. Typically, there are only two options to get financial relief from debt, and they include debt management and filing for bankruptcy. Less pressure from debt collectors and an immediate improvement in financial situation will be experienced, no matter which avenue is chosen.
If you choose to use debt settlement, you can pay off loans in a couple years and pay only approximately one-half. Bankruptcy is a bit different in that it can come in the form of a Chapter 7 or in the form of a Chapter 13. Choosing Chapter 7 bankruptcy means that your unsecured debt will be erased and that will let you start all over again, but with your credit impacted. You can pay down your current debt over the next three to five years, and have whatever is left wiped out, if you choose to use Chapter 13 bankruptcy. Chapter 13 bankruptcy is similar to debt settlement since it allows you to pay down (and eliminate) your debt over a set amount of time. Fortunately, though, debt settlement will not impact your credit permanently. Debt settlement is not recorded at all, unlike bankruptcy which can be recorded for up to 10 years and impact your credit.
Debt settlement usually involves a process of negotiating with lenders to reduce payments, forgive some or all of the debt, reduce interest rates, or even combine all of the mentioned options into one amiable package. The idea behind bankruptcy is to help eliminate debt or get help paying it off through protection of the bankruptcy court. Typically this is seen as a ‘liquidation’ or ‘reorganization’ of debt. Through hard work and appropriate planning, all methods can be utilized to reduce debt and get finances back on track. Professionals who specialize in debt management can even help you compare home mortgage loans when you’re ready to take that step.
Keep in mind that today’s market offers plenty of debt management services that can help you overcome your financial woes. You should also keep in mind that you can get much higher quality results by getting advice from a financial professional before you make any financial decisions that could impact your overall monetary well-being. You just might find that a debt management program could be your salvation!
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