Bankruptcy Alternatives - Two Major Options
Why do you frequently hear about bailouts and bankruptcies these days? Well, it is the end result of the economic slowdown.
The uncontrollable debts have led consumers into bankruptcy.
Thus, the purpose of this article is to educate the consumers who are ready to file a bankruptcy case or the persons who are already involved in the process.
The available debt relief options can be classified under two major headings- Debt Settlement and Debt consolidation.
A debtor can choose an option out of the above mentioned options.
For your ease, I have listed down the advantages of both options.
It is you, who should decide which path to choose.
Remember, no one of them is smooth.
This step usually requires a lot of determination and patience on your part.
Debt Settlement- Under this program, the debtor is given a 40% - 60% of discount depending on his ability to pay off what he has borrowed.
The biggest advantage is the erasing of the interest.
In this method both the creditor and the consumer agree to reduce an amount of debts and consider it as a 'payment made in full'.
Is not it advantageous than filing a bankruptcy case and allowing to stamp a black mark in your credit report? A report of this service will stay in your credit report for 3 or 4 years but it is not a barrier for you to obtain any financial service in future.
Thus, this method saves both your financial report as well as your reputation.
You will not be looked down upon as a culprit.
Debt Consolidation- Under this program you can consolidate one or more existing debts into one.
It should be noted that a consumer is given permission only to consolidate debts which belong to the 'secured' category.
You will not receive a discount for your debts, but you will be given a reduced interest rate.
However, make sure that you have a regular income before consolidating your debts, because this payment method is best suited for those who receive an income yet unable to manage their expenses.
The uncontrollable debts have led consumers into bankruptcy.
Thus, the purpose of this article is to educate the consumers who are ready to file a bankruptcy case or the persons who are already involved in the process.
The available debt relief options can be classified under two major headings- Debt Settlement and Debt consolidation.
A debtor can choose an option out of the above mentioned options.
For your ease, I have listed down the advantages of both options.
It is you, who should decide which path to choose.
Remember, no one of them is smooth.
This step usually requires a lot of determination and patience on your part.
Debt Settlement- Under this program, the debtor is given a 40% - 60% of discount depending on his ability to pay off what he has borrowed.
The biggest advantage is the erasing of the interest.
In this method both the creditor and the consumer agree to reduce an amount of debts and consider it as a 'payment made in full'.
Is not it advantageous than filing a bankruptcy case and allowing to stamp a black mark in your credit report? A report of this service will stay in your credit report for 3 or 4 years but it is not a barrier for you to obtain any financial service in future.
Thus, this method saves both your financial report as well as your reputation.
You will not be looked down upon as a culprit.
Debt Consolidation- Under this program you can consolidate one or more existing debts into one.
It should be noted that a consumer is given permission only to consolidate debts which belong to the 'secured' category.
You will not receive a discount for your debts, but you will be given a reduced interest rate.
However, make sure that you have a regular income before consolidating your debts, because this payment method is best suited for those who receive an income yet unable to manage their expenses.
