subject: Debt Relief - How To Legally Eliminate Unsecured Debt While Avoiding Personal Bankruptcy [print this page] The economic recession that America faced has hit millions of Americans. Many of the Americans have been suddenly ladened with unsecured debts, as the recession has resulted in dwindled income and expenses either remaining the same or going up. This has led many to default on their payments resulting into accumulation of debts and the creditors baying for their money. Hence, one starts searching for various modes through which he can get debt relief and also improve on his credit. The modes he has to choose from have to be legal and at the same time should be to his advantage.
Earlier, one of the easiest routes to solve the problem and get debt relief was to declare bankruptcy. But, because of the large scale defaults, the Federal Government changed its policies, making it difficult for the debtors to file for bankruptcy. The debtor would lose his credit rating and would also not get any loans or credits for next 7-10 years.
So now the question is how to legally eliminate unsecured debt while avoiding Personal Bankruptcy.
As it is very important to get out of the liability mess, there are certain legal easy steps that need to be followed:
The first step towards this is to start keeping track of the income and expenditure. This step is very important, so that you are able to prioritize your expenditures and stop those that are not important or could be delayed. This helps in saving on some money and hence paying off some of the outstanding dues.
The second and the most important step towards debt relief is the twin process of debt consolidation and debt settlement. In this process, you can negotiate with your creditors to lower the arrears and also restructure it in such a way that you are able to pay off your liabilities.
But then what is debt consolidation and debt settlement?
Debt consolidation is the process whereby your income, expenditure and repaying capacity is analyzed. Then the reason for default and repaying capacity is explained to the creditor. Based on the findings, past integrity and repaying capacity, the creditor decides to forfeit miscellaneous charges like service taxes, late-payment charges etc. and the restructured arrears are rescheduled according to the debtor's paying capacity.
For the process of debt settlement, the debtor should on the whole have an unsecured debt of $10,000 after debt consolidation to qualify for the settlement. In this, negotiations are made so that the principal amount that is owed is reduced. Hence, the debtor has to pay a lower amount as compared to the original amount in installments that has been decided during negotiations and repaying capacity.
Though you can take this step either on your own or through third-party negotiators, always remember-
Try not to negotiate with the creditors on your own as the chances of arrears being highly reduced is less and.
Choose your negotiator with due diligence so as not to fall into unnecessary traps.
Take the above steps to legally secure debt relief and lead a peaceful life.
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.
Debt Relief - How To Legally Eliminate Unsecured Debt While Avoiding Personal Bankruptcy
