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Debt Settlement Vs. Bankruptcy
Isaac Gervais
If you’re struggling with unwieldy credit card or other financial obligations, you may be wondering what your options are for relief. Many people look into filing bankruptcy as a possibility for getting out of debt, but there are consequences to bankruptcy that you may not have considered. settlement is an option that is drawing more and more people as an alternative to bankruptcy, because it allow you to keep you assets and is a more efficient way to lower you unrealistic monthly costs.


Debt Settlement Can Help You Lower Your Debt

Debt settlement is a procedure whereby your creditors agree to accept a lower total amount of money and regard it as payment in full of the debt. In some cases, your overall can be reduced by as much as 40%-60% of the original amount you owed. The result of owing less money in the long run is that you can also lower your monthly payments, making it possible for you to get back on your feet quickly. Most importantly, unlike with some forms of bankruptcy, which can have you paying high rates for several years, relief is immediate with settlement. With settlement, you can get out of quickly and on your own terms.

Bankruptcy Can Ruin You

Because bankruptcy is a legal declaration of your inability to pay your debts, you may be required to liquidate your assets to pay down as much of your as you can right up front. In short, this means you could lose some of your possessions. If you own a home, a car, or other types of unprotected assets, they could be claimed as partial payment of what you owe. Even if you’re not forced to sell your possessions, in the long run you could end up with even higher monthly payments than you are making now. A Chapter 13 bankruptcy still requires you to pay off some of your debts over a period of three to five years. If you’re trying to achieve financial stability, you know why that may not be a good idea. The truth of the matter is that bankruptcy should only be used as a last resort. Once you have filed, you may not be able to claim bankruptcy again for years.

Don’t Get Confused

Unless you literally have no money and no possessions, bankruptcy can cost you more than it saves you. If you’re the type of person who would rather pay your bills, but you simply find yourself pinned under an unwieldy amount of debt, settlement is probably the better option for you. With settlement, you still pay some of what you owe, but your balance is reduced to a more manageable level. Your creditors will probably be more receptive to a settlement agreement than bankruptcy because they will be able to recover more of their losses through settlement. You will be happier with settlement because you will get to retain more of your assets. If you’re having trouble with payment, start looking into settlement programs today.
 

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