Credit Debt Bankruptcy - The Best Debt Relief Option To Avoid Filing For Bankruptcy

Credit Debt Bankruptcy - The Best Debt Relief Option To Avoid Filing For Bankruptcy

Credit debt bankruptcy filings are expected to increase as we head into yet another uncertain and volatile economic environment. While bankruptcy for many might seem like the easy way out of debt, it really is not. Since the new laws were passed in 2005 filing bankruptcy has become less advantageous and more of a utter nightmare. If you are on the verge of filing for bankruptcy it would behoove you to explore your debt relief options first.

When the new bankruptcy laws were passed in 2005 it made the filing process much more difficult. The application process usually requires the help of an attorney and even if you do everything right, the chances are that you will not qualify for Ch. 7. Ch. 7 bankruptcy is thought of to be the "clean slate" type where all your debts are completely written off and forgiven. Up until 2005 this was easy to qualify for and pretty advantageous. Unfortunately, many consumers took advantage of this and would file just to get bailed out of their debts. This abuse continued until the new laws were passed and now only consumers and small businesses that have 0 net worth and no income coming in will be able to qualify.

If you are experiencing a financial hardship and are struggling to meet your minimum monthly payments then you really only have two options. Debt settlement and bankruptcy, Debt settlement allows you to pay back less than the full balance and settle for a percentage. The typical settlement is around 50% but results vary case by case. As of October 27 2010, debt settlement companies are no longer able to collect upfront fees for their services. This means that if they can't settle your debts, you don't pay a single penny. This makes the process much more legitimate and an overall better deal for consumers.

Getting out of debt through a debt settlement process is currently very popular but you need to know where to locate the best performing programs in order to get the best deals. To compare debt settlement companies it would be wise to visit a free debt relief network which will locate the best performing companies in your area for free.

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