Should You Choose Bankruptcy or Debt Management?
Friday, November 13th, 2009 Subscribe To Our Feed
Are you interested in consumer debt consolidation? If you have a lot of debt, you should be. Consumer debt is on the rise because of our weakened and turbulent economy. Things can get very hard if you have too much debt, even though it’s an accepted part of life for many people. Filing for bankruptcy and getting debt management are usually the most common solutions for financial relief from debt. 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 has two forms, which take very different paths: Chapter 7 bankruptcy and Chapter 13 bankruptcy. You won’t have to pay any of your unsecured debt if you choose to use a Chapter 7 bankruptcy, but you will damage your credit doing so. Choosing a Chapter 13 means that you will use a payment plan to pay off all debts within three to 5 years, and after which all debt will be erased. Chapter 13 bankruptcy and debt settlement are very similar in that they both allow you to pay down your debts over a determined amount of time. Fortunately, though, debt settlement will not impact your credit permanently. Bankruptcy, on the other hand, can stay on your credit record for up to ten years, while debt settlement is not recorded at all.
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 design of bankruptcies is to help individuals pay off their debt and to do so using the protection of a bankruptcy court. This process is usually called a ‘liquidation’ or ‘reorganization’ of debt. You can use both methods combined with good planning and hard work to get finances under control and debt managed. Debt managers can even help you compare home mortgage loans after your finances have recovered.
Your specific financial situation can be met and remedied by simply doing some research and comparing some of the debt management services available on today’s market. 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 plan is your saving grace!
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