Bankruptcy,Debt,Settlement,Whi finance, share, loan Bankruptcy or Debt Settlement: Which Is the Right Option?
If your financial problems have reached the point where you do not see a way out and you feel as though you are drowning in debt, your best way out is through declaring bankruptcy. Filing may well allow you to get your finances back on track Thankfully, there are now several web sites that are there to help people like you with bad credit to find the fast personal loans that you need. When you have bad credit, the first thing that you should be looking for is a loan company that
The problem with debt is that it can get out of control quite quickly. The good news is that, even when the mountain becomes too high to climb, there are solutions to the problem. Selecting one of a number of constructive repayment programs is the best way to clear the debt, with bankruptcy or debt settlement the chief choice to make.The purpose of both of these methods of debt repayment are the same; to lift the weight of debt without having to pay it in full. However, their respective terms and consequences are quite different. For example, filing for bankruptcy is a complex matter today, while settlement offers no guarantees.But with as much as 75% of debt cleared through debt settlement programs, and as much as 100% cleared through bankruptcy, they both provide a viable way out for those of us in real financial trouble.Advantages of SettlementThe main issue when choosing whether bankruptcy or debt settlement is the right course of action is the amount of debt that needs to be repaid. Agreeing a settlement means negotiations between a debtor and a creditor ends with a percentage of the debt to be paid in return for wiping the slate clean.Normally, a professional debt settlement company is hired to carry out negotiations. This is a good idea, since creditors can be very stubborn in seeking the highest percentage possible. However, a good deal can see the debt slashed to 40% if its actual value. This is often more than filing for bankruptcy achieves, but that too is dependent on other factors.A repayment schedule of 3 to 4 years is normally agreed, which must be strictly adhered too. And remember that debt settlement programs are not done in a court, so a creditor can walk out and begin legal proceedings any time they want.Bankruptcy: Which Chapter to Choose?There is no doubt that bankruptcy is a highly effective way to alleviate the debt burden, but it is not so clear cut as having debts wiped out by a court. This is an important factor to consider when deciding whether bankruptcy or debt settlement is the best course of action.Unlike in the past, when filing for bankruptcy effectively meant paying 0% of the debt incurred, there are different facets to the matter today, with cases filed under certain chapters of the Code of Bankruptcy. There are 4 in total: chapters 7, 11, 12, and 13, with the extent of the financial situation dictating which is the most appropriate.Business owners whose finances and assets are practically nil, can filed under Chapter 7, but Chapter 13 covers individuals unable to pay their debts. Both chapters 11 and 12 relate to reorganizing debt, ensuring that some (if not all) the debt is repaid, much like debt settlement programs.The True CostsAnd what of the true costs of the respective options? What are the consequences? Well, whether debts are cleared through bankruptcy or debt settlement, there are certain fees to be paid. However, the real consequence is the effect either can have on your credit report.Typically, filing for bankruptcy will incur fees of anything between $1,500 and $3,000, whereas a settlement agreement usually means fees of up to $5,000. This can draw many to the bankruptcy courts, but if a Chapter 13 ruling is made, then it could take 10 years for the ruling to be removed from the report.In contrast, despite its extra cost, debt settlement programs can remain on your record for just 2 years, ensuring an improved credit status can return much more quickly.
Bankruptcy,Debt,Settlement,Whi