If you are knee deep in debt, you may feel that there is no way out other than to file bankruptcy. However, current bankruptcy laws may prevent you from seeking Chapter 7 protection. And, even if you can, it is not always the best solution. Filing for bankruptcy should be considered a last resort option.
One thing that you may want to consider is consumer debt settlement.
Credit card debt settlement (or Consumer Debt Negotiation) is where the lender agrees to accept less than you owe on a consumer debt account. The reason they will do this is because something is better than nothing and they realize that as an unsecured creditor if you DO file bankruptcy they will be left out in the cold.
The time to turn to consumer debt settlement is when there is just no way you can reasonably pay what you owe. Your credit will suffer and there may be tax consequences, so it is important to go into consumer debt negotiation with your eyes open.
The good news is that you can get your accounts settled for anywhere between 25%-60% of what you owe.
You may think that you need to hire one of many consumer debt settlement companies to handle this for you.
Unfortunately, the debt settlement industry is highly unregulated and many of the companies out there will take your money and leave you very little in return. Like most credit repair, it is best to handle consumer debt settlement yourself. If you can negotiate credit card debt on your own, you will save a great deal of money. (If you do decide to hire a company, you may want to consider a Christian debt reduction firm.)
If you do decided to hire a firm that offers consumer debt solutions or debt settlement company, the best thing to do is get a referral from someone who has had a positive experience. It is also a good idea to check with the better business bureau.
Also, make sure you have a clear understanding of the fees you will be charged BEFORE you sign up. While they may claim to be able to save you 60% of what you owe, once you take their fee into consideration, this amount will be a lot less.
It is important to understand that debt settlement is for revolving debt only. If you are behind on your home, you may need to seek foreclosure help.
You must log in to post a comment.