subject: Debt Relief Services – Is Bankruptcy A Possible Solution To Debt Relief [print this page] Debt Relief Services Is Bankruptcy A Possible Solution To Debt Relief
There are several types of debt like credit card, mortgage and many other types of loans. Most people have to take loan in some form or another at some point in their life, be it for buying a house, for school or to pay off medical expenses. While most of the borrowers pay off their debts, for some repayment becomes a problem due to unforeseen circumstances. To deal with such situations there are several debt relief methods in place.
Credit counselling: This is one of the initial steps that a debtor should take when they are looking at various debt relief options. You need to find a certified credit counsellor to go through your financial statements. Once the counsellor has gone through the consumer's earnings and expenses he can work out a plan for him. There are several non-profit agencies which offer this service and this counselling is a must if you want to file for bankruptcy.
Debt consolidation: This debt relief method enables a debtor to roll all their debts into one large loan with a lower interest rate. This method can help you save a lot of money in the long run. However, it is important that a financial expert goes through your consolidation plan to make sure that you save money through this process and you financial condition get s better.
Debt settlement: This method of debt relief enables a customer to pay back their creditor a lump sum amount and get a reduction on the overall debt amount. This is a very useful tool which is effective only for unsecured debts. A debtor can make a settlement offer himself or through a settlement company.
Chapter 7 bankruptcy: This option is available to those debtors who earn less than the state median income. Here an assigned trustee will sell off assets as part of bankruptcy liquidation process in order to pay off creditors. After the liquidation the debtor gets a fresh start will all debts discharged.
Chapter 13 bankruptcy: This is a bankruptcy option for those who do not qualify for bankruptcy under chapter 7. It is mainly a repayment plan through which a debtor makes monthly or biweekly payments for 3 to 5 years. If the debtor keeps making timely payments for the assigned duration then he is discharged off his debt to make a fresh start.
With these options available one can choose the debt relief which suits his financial condition the best.
