With 2012 upon us, many Americans will be scrambling to begin fulfilling their New Year’s resolutions. Considering the US economy is still in the tank, many of these same Americans will be working on getting out of debt over the next year to come. The radio and TV ads have already begun touting the possibility of eliminating debt through debt settlement without destroying your credit. Before you get all excited and obligate yourself to one of these debt settlement companies, first take the time and talk to a bankruptcy attorney. A bankruptcy attorney will be able to shed a lot of light on the subject of debt settlement and continue on to the subject of filing bankruptcy. They will be able to give you a rundown based on your current situation.
The way the typical debt settlement programs work is they collect monthly installments from the debtor until they accumulate enough cash, less their fee, to offer a settlement with the creditor. The problem with the program is the creditor is not obligated to abide by any rules set up by the debt settlement company. This is why many people entering into these programs, while they’re in the process of gathering cash, are sued by their creditors. That destroys the theory of leaving debt settlement with a stellar credit rating. That’s why filing bankruptcy is so much better than debt settlement. First of all, you know what you’re going to get when filing bankruptcy. The bankruptcy attorney will let their client know what’s expected of them and how the process will work. There are not too many gray areas that are filled in. A bankruptcy filing uses the power of the US court system to protect the debtor while going through the process. When an individual files for bankruptcy a court ordered automatic stay is put in place stopping all collection activity by the creditors. The automatic stay is one of the most powerful tools that a bankruptcy attorney can use to protect their client. It will also stop foreclosure, lawsuits, judgments and wage garnishments. This alone allows the debtor to live once again not worrying about answering their phone. Filing Chapter 7 bankruptcy is usually one of the quickest ways to get out of unsecured debt. A typical Chapter 7 bankruptcy will take 4 to 6 months from the beginning until the end. Don’t believe the ads on TV and the radio, do your own diligence and then make your decision.