Debt Relief Options - Why Many Debt Ridden Americans Are Choosing Debt Settlement Over Bankruptcy
The passage of new bankruptcy laws in 2005 made the process of bankruptcy much more difficult for the consumer. Stricter requirements and harsher penalties were put into place with the passage of these new bankruptcy laws. As a result, many consumers that are experiencing a financial hardship and have at least $10k in unsecured are opting for debt settlement.
Debt settlement is where consumers are able to pay back a percentage of their unsecured and the creditor agrees to forgive the rest. This is typically the last option before filing bankruptcy. Creditors will agree to take partial payment if they believe the consumer is a legitimate candidate for bankruptcy because if the consumer were to declare bankruptcy they would likely receive nothing. 50% of their money back is better than nothing for most creditors of unsecured debt.
While the debt settlement industry has recently been criticized from members of congress, it is hard to argue with the facts. The debt settlement industry settled over $1 billion in unsecured debts in 2009 alone. This resulted in approximately $400 million being collected for creditors of unsecured debt and $600 million being eliminated off the books of debt ridden Americans. Debt settlement is an aggressive debt relief option but can pay off big for consumers who stick with the program. Websites like FreeDebtReductionHelp.com will provide free help to debt ridden consumers to determine what debt relief option makes the most financial sense.
A debt settlement will typically affect a consumers’ credit score for 2-4 years while bankruptcy will affect a credit score for at least 7 years. Any debt settlement companies that say credit scores will not be affected are not being truthful and probably not worth doing business with. Consumers who opt for debt settlement ultimately make the decision that they’d rather eliminate a bunch of their unsecured debt rather than have a high credit score.
Debt settlement is a legitimate alternative to bankruptcy but not all consumers will be eligible for it. In order to qualify the consumer must be at least $10k in unsecured debt and also be able to prove a legitimate financial hardship such as a loss of job or medical issue. There are free debt relief networks that help consumers locate TASC certified debt settlement companies as well as provide a free consultation to go over all available debt relief options. FreeDebtReductionHelp.com is one of the top debt relief networks out there. If a consumer is going through a financial hardship and understands the risks associated with debt settlement, then it can be a viable way to eliminate unsecured debt and clearly is a better alternative to filing bankruptcy.
If you are struggling with paying back your credit card debt or any other unsecured debts there is legitimate help out there. Debt settlement usually makes financial sense for consumers with over $10k in unsecured debt. There are also other options available. To talk with a debt relief counselor for free help check out the following link:
Or Call: 877-853-6466
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