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. Filing for bankruptcy and getting debt management are usually the most common solutions for financial relief from debt. Choosing one or the other will immediately improve your financial situation and help relieve pressure from debt collectors.
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. 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. 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. However, debt settlement does not impact your credit on a permanent basis. 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 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. Debt can be managed and finances controlled by utilizing the methods either or both of the methods (bankruptcy or debt management). Professionals who specialize in debt management can even help you compare mortgage rates when you’re ready to take that step.
You can easily determine which debt management service will help your unique financial situation by doing some research and comparing the services available on the market. 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 may discover that a debt management plan could be your salvation!
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