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Debt Relief vs Bankruptcy

Every day, individuals and families are forced into bankruptcy simply because there is no other way out of their financial distress. It is important to realize that, before having to file for bankruptcy, every possible option should be explored to help avoid the single most damaging blemish that a credit report can possess.

Companies that offer debt management, also known as debt relief, provide special programs to help those eligible to repay their debts without having to file for bankruptcy. Many people assume that just because their payments are already late and their credit is already bad, bankruptcy cannot possibly hurt them. However, nothing could be further from the truth. Bankruptcy is severe and is only for those who have exhausted all other efforts. When you file for bankruptcy, your credit report will reflect the filing for up to 10 years. Whenever you apply for a credit card, a mortgage loan or even apply for a job, they will know that you filed for bankruptcy.

So, how will debt consolidation or debt settlement services prove to be more beneficial? Quite simply, either of these methods will show your attempt to repay a debt and will only be reflected on your credit report for up to 7 years. With a debt consolidation service, most creditors will begin reporting your account as current within months of enrolling in a program. A debt settlement notation will appear as "Settled account" and will show future lenders that you repaid your creditor(s) according to a mutually agreed upon amount.

Now that we have explored the long reaching effect of debt management and bankruptcy, take a moment to consider the immediate differences of each. When you enroll in a debt consolidation or debt settlement program, you are simply picking up the telephone and speaking with a credit counselor about your finances. If approved for a program, you will sign a contract and payments will be deducted from your bank account according to the agreement. If you file for bankruptcy, you will be required to disclose every asset that you own, your income and expenses. If you own more than you are permitted to keep according to your state's exemption laws, you may be forced to surrender it to the bankruptcy court who will liquidate the item(s) to repay creditors. In addition, you are required to appear for questioning by a court-appointed trustee hired to oversee your bankruptcy case. When you look at the immediate differences between debt consolidation or debt settlement and filing for bankruptcy, it's obvious that the latter should only be chosen as a last resort.

Debt consolidation is designed to lower your monthly payments and interest rates in an effort to make your budget more feasible. Debt settlement, on the other hand, is a fast and permanent solution to your debt providing you have the funds available to negotiate a fair amount. Most debt management companies will conduct a brief telephone interview, evaluate your situation and explain what options are available for your own individual situation. There is no one universal method that works for everyone, which is why debt management is a uniquely customized program that is as individual as the debtors themselves. Choosing the right debt relief program is all about recognizing the need for help and not being too proud to ask for it.

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Debt Relief In The News

Tips To Get Out Of Spending For The Holidays Shared By National Debt Relief

Holidays are fast approaching and it is synonymous to huge expenses that is why National Debt Relief shares some handy tips to manage holiday spending better. The article titled "How To Get Out Of Spe...

Published:  Sun, 18 Nov 2018 07:11:00 GMT



Betsy DeVos sued again over delays in student debt relief

(CNN) - Secretary of Education Betsy DeVos was hit with another lawsuit Tuesday claiming she failed to cancel student debt owed by people whose for-profit colleges have been shut down. The new lawsuit ...

Published:  Tue, 13 Nov 2018 14:49:00 GMT



Herring wins penalties, debt relief for retired veterans, civil servants targeted by illegal loans

Attorney General Mark Herring has secured more than $50 million in debt relief and ordered civil penalties as a result of his lawsuit against Future Income Payments and its owner, Scott Kohn for ...

Published:  Thu, 15 Nov 2018 11:12:00 GMT



Virginia Attorney General wins $50 million in penalties, debt relief in lawsuit against illegal loans

Attorney General Mark Herring announced Thursday that he won $50 million in debt relief and ordered civil penalties in a lawsuit against Future Income Payments, LLC; FIP, LLC; and their owner ...

Published:  Thu, 15 Nov 2018 13:51:00 GMT



Report: DeVos sued again over student debt relief rule

WASHINGTON - Besty DeVos was supposed to cancel student debt owed by people whose for-profit colleges have shut down. But according to new reports from CNN and The Hill, DeVos has yet to do that, and ...

Published:  Wed, 14 Nov 2018 05:17:00 GMT



Tips On How To Be A Saver Shared By Debt Consolidation USA

(PRLEAP.COM) A lot of people are having a hard time managing their finances because they have no savings that is why Debt Consolidation USA shares some ideas on how people can start saving money. The ...

Published:  Thu, 15 Nov 2018 00:02:00 GMT



Macau casino junkets plead for tax relief, debt collection help

Casino junket operators are asking Macau's government for tax relief and more help in chasing down VIP gambling debtors. Tuesday's edition of the Macau Gaming Summit 2018 saw junket operators ...

Published:  Thu, 15 Nov 2018 00:06:00 GMT



President Trump: Hurricane Relief Should Not Pay Puerto Rico Debt

Because of people like you, another world is possible. There are many battles to be won, but we will battle them together-all of us. Common Dreams is not your normal news site. We don't survive on cli...

Published:  Wed, 14 Nov 2018 12:53:00 GMT



Reasons why Using a 401(k) to Pay Debt Is a Bad Idea, As Shared by National Debt Relief

A lot of people have been diligently putting money aside in their 401(k) for retirement and National Debt Relief explains why it is a bad idea to use that fund to pay for debt obligations. The article ...

Published:  Fri, 16 Nov 2018 07:12:00 GMT




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