Clear Your Debt Or File Bankruptcy?

Sept. 10, 2011 - PRLog -- Clear Your Debt generally gets one main question when facing “no more money” coming in, credit cards bills repeatedly showing up with their most feared color, red of course is; "what is the least damaging to overall money and credit, filing bankruptcy or clearing your debt with creditors?"  Keep in mind that debt negotiation is completely different than settling your debt.

If you have already spoken to a lawyer about bankruptcy you likely face the courts being backed up for at least 4-5 months with the amount of people filing for bankruptcy or getting into a debt settle program so they can Clear Your Debt. With the economy the way it is credit card creditors, medical debt creditors and other unsecured forms of debt that you’re being chased after for can now more easily be settled by having a debt settlement law firm handle your debt relief needs.  http://erase-your-debt-now.com

There is a hitch and very few people are made aware of the cons of debt settlement.  First of all, you have to pay the difference in the settlements as income tax.  Hopefully you have saved your money, as you haven’t been paying any of the creditors so you can write this check when you file your taxes.  It’s also more helpful if you have your debt taken care of as far away as April 15th.  This will give you more time to accumulate savings so you can Clear Your Debt.

So the question is clear. Do I want to absolutely ruin my credit for up to 10 years which will eliminate almost all debts, but your only chance of a credit card at that point is a debit card.  Perhaps you should have thrown those credit cards out to begin with and live at your means vs. above your means.  http://www.prlog.org/11652980-how-to-clear-your-debt.html

It’s common knowledge that people use bankruptcy as an absolute last resort, as the long-term damage it does to your credit sucks. You’ll likely find yourself unable to get credit when you really need it with a bankruptcy on your record. The option you choose also depends on how much you owe. So if you file for bankruptcy over a relatively small amount of money it probably makes more sense to pursue debt settlement services, so you can Clear Your Debt. Instead, you’ll be able to pay the money back over two or three years, causing less damage to your credit history than a bankruptcy.

Once a debt settlement program is complete, those that had poor negative rating should be on their way to rebuilding a reasonable credit score and being able to apply for new lines of credit such as mortgages and car loans. In contrast to the seven to ten years minimum that it will take to start rebuilding your credit score after bankruptcy this is a much shorter period.

When you initially start a debt settlement program you willingly cease making payments to creditors while the debt settlement company negotiates on your behalf. This obviously leads to default payments. However, a good debt settlement company will also ensure that once a renegotiated debt figure is fully repaid, the lender will report that your debt has been paid in full. This is reported to the credit agencies and marked against your credit rating - often seen as a positive mark compared to the alternatives.

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Debt settlement (also known as "debt resolution") is available to consumers who are struggling with high debt. It is quickly becoming the most preferred option for those with serious debt issues who wish to pay off their debts quickly, cost-effectively, and without the longer-term financial, emotional, and social impacts associated with other debt relief options, such as bankruptcy.