Bankruptcy or Consumer Credit Counseling?
Are you interested in consumer credit counseling? 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. Typically, there are only two options to get financial relief from debt, and they include debt management and filing for bankruptcy. No matter which is chosen, either will help finances by alleviating creditor harassment and by improving your financial situation.
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 erase all existing debt by choosing a Chapter 13 bankruptcy which will mean a payment plan for the next 3 to 5 years. 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. However, debt settlement does not impact your credit on a permanent basis. 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. 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 mortgage rates after your finances have recovered.
You can easily determine which debt settlement service will help your unique financial situation by doing some research and comparing the services available on the 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 may discover that a debt management plan could be your salvation!
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