subject: How To Avoid Bankruptcy - The Top 2 Debt Relief Solutions [print this page] How To Avoid Bankruptcy - The Top 2 Debt Relief Solutions
Are you stressed out due to your financial conditions? If you are thinking to file for bankruptcy then the following article will really help you out. Although bankruptcy is the legal method but since it contains many uncertainties and difficulties, it is recommended that you should avoid it as much as you can. The major draw back of bankruptcy is that it makes your credit report worst due to which you get ineligible of using any facility provided by banks and other financial institutions for the next several years. The process requires many legal tests and other official documentations. Legal bankruptcy attorneys charge high amount of fees. As you are already in financial crises, you won't be able to pay back the amount of fees as per to their demand. The Option of bankruptcy is also not good from the lenders' aspect as well because in this way they are also facing the situation of loss. In order to kick out the option of bankruptcy from the market, the federal government introduced debt relief options. Among these options, debt settlement and debt consolidation are considered as the top 2 debt relief solutions.
Debt consolidation: consolidation is the process in which you will get the option of shifting all your debts into a single debt. Financial institutions and banks give one single consolidated loan to you through which you pay back all your dues and then instead of paying to many lenders, you just pay the amount for this single loan. With the help of credit consolidation, you will get rid of your dues in the time frame of 3 to 4 years.
Debt settlement: in debt settlement, the negotiation companies will talk to your lenders and will make them aware about the worst financial conditions from which you are going on. Financial experts of these companies will bring 50 % to 70 % elimination in your outstanding balances. Via settlement process, you will completely come out from the pools of debt within 2 to 3 years.
If the gathered amount of debts is less than ten thousand dollars then debt consolidation is the right choice but if the amount is more than $ 10 K then debt settlement is the best option to avail.
If you have over $10,000 in unsecured debt it may be a wise financial decision to consider a debt settlement. Due to the recession and overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals.
