What You Need To Know About Debt Settlement And Bankruptcy

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What You Need To Know About Debt Settlement And Bankruptcy

Thursday, September 24th, 2009 Subscribe To Our Feed

There are many reasons why debt settlement is one of the best debt cures you can use. Contrary to what you may believe, bankruptcy will not wipe out all of your debt unless you qualify for Chapter 7 which is getting harder every year. The bankruptcy laws of 2005 enacted by the credit card companies made it harder to discharge your debts with Chapter 7. So a better alternative to filing bankruptcy is to negotiate with your creditors and aim for a settlement. In the short article, I will give you some credit debt settlement advice to help you learn more about it and understand why you should use it instead of filing bankruptcy or using debt consolidation or other debt elimination methods.

What goes on when you use debt negotiation? Debt settlement is when you settle your entire balance with your credit card company with a payment that represents a fraction of the total balance. Your creditors would rather settle and get a small payment now than wait a few years through the bankruptcy courts.

In many cases, you can settle your credit card debts for 40% to 60% of what you owe. This would be the same as slicing your monthly credit card payments in two. When you do this it's easy to get out of credit debt. That’s what makes this one of the most powerful credit debt cures you can use.

You don't have to lose sleep about your 30% APR on your credit card because you will work towards getting the whole balance wiped out with debt settlement with one payment.

I would not be taking a look at my credit score when using debt settlement, or bankruptcy for that matter, it's going to be bad. If you were thinking about bankruptcy your credit score was going to get ruined anyways. And it was going to be a matter of public record. Debt settlement will still adversely affect your credit score just like bankruptcy. Your credit will be much easier to rebuild once you have no debt on the books.

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