Debt Settlement – What Should I Do?
Many Americans are facing financial troubles with the downturn of the US economy. Many have lost their homes to foreclosure and are still making minimum payments on their credit cards just to get by. Many of these good hard-working folks are looking for a solution for their debt problems. Over the last couple years there has become a dilemma of whether to file bankruptcy or choose debt settlement. In a nutshell, the difference is based on the amount and type of debt an individual has. Debt settlement, typically works only with unsecured debts, which is very similar to Chapter 7 bankruptcy. The difference between the two is with a Chapter 7 bankruptcy the debts are wiped out by the debtor is responsible to pay nothing back.
On the other hand, with debt settlement, the individual negotiates with a creditor for a reduced amount, typically about 50% of the balance, then has to pay them in a lump sum to charge off the debt. The individual deciding should look into their crystal ball and try to imagine what’s in their future. Depending on their career and other plans for the future should determine if a bankruptcy filing could possibly damage their chances of what their plans for the future hold. A Chapter 7 bankruptcy will stay on one’s credit report for up to 10 years. One shouldn’t worry about whether or not they will be able to get credit because of filing bankruptcy, because in both situations credit will be available in a few years. The only place a bankruptcy could hurt is in a security clearance, where an employer requires a background check and credit report. In this situation, a person should try and avoid filing bankruptcy if possible. If that’s not the case, the decision should be made based on the ability to pay the agreed upon settlement amount or if the debt is too much, filing bankruptcy is probably the only other option.
Getting answers to those tough bankruptcy questions needs to be thought of before you make a decision when it comes to your financial problems. Finding the answers to help you understand your situation more clearly can help you make an informed decision about filing bankruptcy. Take a minute to call or fill out the form to have a FREE NO OBLIGATION CONSULTATION with a bankruptcy attorney in your area.