Bankruptcy or Credit Consolidation?
Are you interested in consumer credit consolidation? If you have a lot of debt, you should be. Consumer debt is on the rise because of our weakened and turbulent economy. 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.
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 three to five 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. Bankruptcies are meant to help people pay off their debt completely or get help paying it off through court protection. This process is usually called 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. Debt managers can even help you compare mortgage rates after your finances have recovered.
Keep in mind that today’s market offers plenty of debt settlement services that can help you overcome your financial woes. It’s advised that you seek out trusted and quality debt counselors before you decide on any financial matter. You will help yourself by getting specialized guidance from a professional debt manager that can provide better results in a shorter period of time. You just might find that a debt management program could be your salvation!