Choices In Debt Relief

March 22, 2012 by  Filed under: Bankruptcy 

Finding relief from a large debt load can be a tedious job. There are several options available to help resolve debts and bring financial stability, but knowing which is right isn’t always easy. Anyone looking for help should start at the basics, reviewing the options and the different benefits and risks associated with each.

Debt Negotiation

Many people have never even considered negotiating with creditors. Assuming that creditors are too stubborn to negotiate, many people lose out on what debt negotiations have to offer. One advantage to negotiating debts directly with a lender is control. In negotiations, many people are able to successfully lower their payments to a level they can afford without putting assets in jeopardy or causing further credit damage. Working directly with a lender can be both good and bad. While direct negotiations can quickly stop delinquent account standings, they can also be stressful when attempting to negotiate with multiple creditors and several accounts. Further, not all creditors are willing to negotiate at first and may require additional time or effort on the part of the consumer.

Debt Settlement

Settling debts is often an appealing option for those who are unnecessarily afraid of the bankruptcy process. Although debt settlement can provide a lowered debt liability and monthly payments, it tends to come with more risks than benefits. First, debt settlement is rarely successful without the help of a third part company, which can cost the consumer more out of pocket expenses. Also, debt settlement can be further damaging to a consumer’s credit. Future creditors may view a consumer as a borrowing risk when debts are “settled” rather than “satisfied” through repayment.

Bankruptcy

Filing for bankruptcy is an option that many people fear due to the many myths and misconceptions associated with the process. In fact, most people who have gone through a bankruptcy end up far better off than those who choose to ignore or resolve their debts through other means. Bankruptcy can provide two ways of debt relief: through a Chapter 7 “settlement” or a Chapter 13 repayment plan. A Chapter 7 bankruptcy is a great way to eliminate debts quickly. However, there are some additional risks of asset liquidation for non-exempt property. A Chapter 13 bankruptcy takes a bit longer to resolve due to the repayment plan, but is far better in the long run when debts are considered “satisfied” rather than “settled”. Although both types of bankruptcy are noted on a consumer’s credit history many people see an improvement in their standing after the debts are resolved, giving them a unique chance to start fresh.

The Lee Law Firm is a Fort Worth, Texas bankruptcy firm that aims to provide local residents with high quality legal representation at affordable rates. Their attorneys are professional and compassionate, giving clients the personalized attention they deserve. When filing bankruptcy, the Lee Law Firm is the right choice to help in the face of financial hardship.

Article Source:
http://EzineArticles.com/?expert=Christopher_M

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!


You must be logged in to post a comment.

Prev Post:
Next Post: