Credit Card Debt Solutions - Bankruptcy Vs Debt Relief - Which One Should You Pick
If you have unbearable credit card debt, you're probably asking yourself what are the solutions.
You have multiple choices ranging from bankruptcy to different forms of debt relief.
But which one is the best for you? Bankruptcy is legally declaring your impairment or inability to pay your creditors.
There are two types of bankruptcy: Chapter 7, which will make all your debts void with the exception of certain federal debts such as student loans, and Chapter 13, which demands you come up with a payment plan to cover as much as you can of your debt in a period of 5 years.
However, the ramifications of filing for bankruptcy run much deeper than that.
Your bankruptcy will show up on your credit report for the next 10 years.
Debt relief, on the other hand, is a more reliable way to settle your debts.
It can mean anything from making a workable budget with your debt counselor to debt settlement or debt consolidation.
Debt counselors can help you with a debt management plan to determine your income and budget or re-negotiate rate interests and payments with your creditors.
This type of debt relief usually works if your financial problem isn't very serious.
For more complicated situations, a good choice is consolidation.
This will bundle up all your bills into just one monthly payment, with just one interest rate.
If you find that you just can't keep up with your payments, you should opt for debt relief in the form of settlement.
This usually involves a lump sum that is less than the amount you owe, which will be accepted by your lenders as full payment.
It is entirely up to you to choose what option suits you best.
However, consider the long term benefits of debt relief as opposed to the lasting mark bankruptcy would leave on your credit report.
You have multiple choices ranging from bankruptcy to different forms of debt relief.
But which one is the best for you? Bankruptcy is legally declaring your impairment or inability to pay your creditors.
There are two types of bankruptcy: Chapter 7, which will make all your debts void with the exception of certain federal debts such as student loans, and Chapter 13, which demands you come up with a payment plan to cover as much as you can of your debt in a period of 5 years.
However, the ramifications of filing for bankruptcy run much deeper than that.
Your bankruptcy will show up on your credit report for the next 10 years.
Debt relief, on the other hand, is a more reliable way to settle your debts.
It can mean anything from making a workable budget with your debt counselor to debt settlement or debt consolidation.
Debt counselors can help you with a debt management plan to determine your income and budget or re-negotiate rate interests and payments with your creditors.
This type of debt relief usually works if your financial problem isn't very serious.
For more complicated situations, a good choice is consolidation.
This will bundle up all your bills into just one monthly payment, with just one interest rate.
If you find that you just can't keep up with your payments, you should opt for debt relief in the form of settlement.
This usually involves a lump sum that is less than the amount you owe, which will be accepted by your lenders as full payment.
It is entirely up to you to choose what option suits you best.
However, consider the long term benefits of debt relief as opposed to the lasting mark bankruptcy would leave on your credit report.
