Bankruptcy Alternatives - Why Debt Settlement Is A Better Option

Bankruptcy Alternatives - Why Debt Settlement Is A Better Option

Do you have more debt than you have money to pay for that debt? Are you feeling overwhelmed? Bankruptcy may seem like the only answer, but you need to hold on a minute. Hold on at least until you finish reading this article. It may seem there are no other answers, but there is protection and debt settlement is a much better answer. Some people have no idea what debt settlement is and some attorneys will not tell you. So before you file bankruptcy wait and read!

So what is debt settlement? Debt settlement is an agreement between you and your credit card companies. Credit card companies realize that when you stop paying your bill they may never see their money for you will file bankruptcy. They are anxious to work with you. They will sometimes even recommend a professional to you. This professional will serve as your trustee. They will make the payments each month All you have to do is send in the agreed upon amount of money each month. Also until your debtors are paid off you do not owe this professional a penny. The money is kept in an interest bearing account and your name is on the account. The account is kept at a FDIC insured bank. Some of these companies can even negotiate a statement that your credit will not be hurt.

There are three forms of debt settlement. They are debt negotiation, debt consolidation and debt consolidation loans.

Under debt negotiation you start by paying a fixed monthly amount to the company which puts your payments into an account where it adds up. The company will negotiate with your creditors on your behalf and you will then stop paying your creditors. Generally you will end up paying between 35% and 70% of the outstanding balance.

Under debt consolidation you turn over your account information. The company makes the payments to your creditors for you.

Under a debt consolidation loan you take out a loan to cover your debt. Usually you have to put up collateral on this debt. If you miss a payment you loose the collateral.

The new bankruptcy laws make debt settlement a better option for most people.

Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Check out the following link to locate legitimate debt help in your state.

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