subject: Bankruptcy Alternatives - Why Filing a Personal Bankruptcy Should Be Your Last Resort [print this page] Are you looking for bankruptcy alternatives? Do you want to know why filing a personal bankruptcy should be your last resort? This article tries to answer most of the common questions related to bankruptcy and its alternatives.
We all know that the US economy has been hit by a recession and it is because of this reason that thousands of people have lost their jobs. They are now finding it difficult to repay the debts that they have and thus they are becoming defaulters. In order to avoid the harassment calls from the creditors, most of them are opting for bankruptcy filing. Once they are successfully filing for bankruptcy, they are facing numerous problems. These are discussed below:
Bankruptcy on first place has become difficult to file for. This is because of the new regulations laid down by the government. People are now required to qualify for the same. This means that they are now required to go for credit counseling session with the counselors selected by the government. If the counselors think that the person is in a situation to repay the debt either partially or completely, he or she will not be allowed to file for bankruptcy. Instead, the counselors will help the person in building up a new budget and suggest him/her the best debt relief option that will work!
After a successful bankruptcy filing, the credit score of the consumer goes down and the report of bankruptcy shows up on the credit history for the period of 7-10 years. During this period, the consumer cannot get any credit even if he or she needs it!
After 7-10 years, the consumer gets back credibility but the rate of interest at which he or she can get further credit is higher than the normal market interest rates.
It is because of these reasons that the option of bankruptcy filing must be kept as the last resort. However, there are several alternatives to this method. The best and the most widely used method being that of debt settlement. This method of settlement can ensure that the unsecured debt that a consumer has is eliminated by at least 50% and up to 70%. This method is less time consuming that personal bankruptcy and there are no legal hassles. There is no requirement to be in touch with the attorneys. A typical settlement will take 1-3 years to complete. Once the creditor agrees to eliminate a certain percentage of the debt, the consumer needs to repay the remaining amount in one single payment.
Debt settlement is a legitimate alternative to filing for bankruptcy. There are also other debt relief options available which is why it would be wise to speak with a debt relief specialist.
Bankruptcy Alternatives - Why Filing a Personal Bankruptcy Should Be Your Last Resort
