Consumer Credit Counseling as an Alternative to Bankruptcy
Interested in debt consolidation? If you’re carrying a lot of debt, you owe it to yourself to be. In our current weakened and difficult economy, debit is rising among consumers. 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.
Settling debts means that the balance owed will be paid off in just a couple years and only about half of the total debt will actually be paid. 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. You can erase all existing debt by choosing a Chapter 13 bankruptcy which will mean a payment plan for the next 3 to 5 years. Similar to debt settlement, Chapter 13 bankruptcy allows you to pay down your overall debt over a set period 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 is typically the process of negotiating with debtors to reduce debt, or even forgive it completely, reduce interest rates, lower monthly payments, or even all of the mentioned options combined. The idea behind bankruptcy is to help eliminate debt or get help paying it off through protection of the bankruptcy court. This is often called a ‘reorganization’ or a ‘liquidation’ of debt. You can use both methods combined with good planning and hard work to get finances under control and debt managed. Professionals who specialize in debt management can even help you compare home mortgage rates when you’re ready to take that step.
Your specific financial situation can be met and remedied by simply doing some research and comparing some of the debt settlement 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 could be your salvation!
