Credit debt bankruptcy - the best alternative to filing for credit card debt bankruptcy

Credit debt bankruptcy - the best alternative to filing for credit card debt bankruptcy

There are more American consumers on the verge of credit debt bankruptcy than ever before. After one of the worst recessions since the Great Depression, consumers and small businesses are stuck with massive credit card balances. Before filing bankruptcy however it would behoove you to look into your debt relief options.

If you cannot afford to pay back your credit card bills there are really only two options. The best alternative to filing for credit card debt bankruptcy is debt settlement. Debt settlement programs negotiate the balance on credit card debt can typically are able to eliminate 40-60% of the overall balance. While every case is different, consumers will get at least 35% of there balance removed using a settlement program. If the settlement company is unable to eliminate at least 35% of your balance then you will not have to pay a single penny. New federal laws that were passed on October 27th 2010 enforce this. Debt relief programs cannot collect upfront fees anymore. Therefore debt settlement should definitely be at least attempted before filing for credit debt bankruptcy.

Filing for credit debt bankruptcy will negatively effect your credit rating for at least 7 years after the process is complete. With the average bankruptcy case taking 3 years to complete, this means that your credit will be negatively effected for 10 years on average. Compare this to a settlement program which can typically repair credit scores after 3 years. Considering the new federal laws, consumers and small businesses on the verge of credit debt bankruptcy should at least give a settlement program a shot. Remember, if they don't settle your debt, you don't pay a penny.

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.

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