With more than 1 trillion dollars in unsecured debt and the nation’s debt at an all time high, more and more Americans find it difficult to keep up with the daily necessities needed to survive. Hoping your debt situation will work itself out is “not” an option to consider and is a foolproof plan to fail. Your creditors main goal is profit, they are not in business to be sympathetic to your needs.
Doing nothing about your financial situation only prolongs the inevitable. Not only does your current situation just get worse, you have no time frame or plan on becoming debt free.
In the past, this has been the method most Americans considered when determining the best plan on how to solve their ever growing personal debt. Typically, the rate of interest on these loans has averaged 10% – 12%. The guidelines are strict, and qualifications to obtain a consolidation loan are becoming more and more difficult. Unfortunately in today’s economic conditions, these loans are nearly extinct.
When it is all said and done, you may have no other way of resolving your financial situation, and filing bankruptcy may be your best, or only option. Once bankruptcy is filed, creditors and collections agencies will cease their collection efforts. However, many Americans today in severe financial distress may not qualify to file bankruptcy. And many who do qualify file bankruptcy without completely understanding the programs and alternatives that are available to them.
There are two chapters of bankruptcy available to Americans today. Chapter 7 bankruptcy, which involves full and complete discharge of your debts with no repayment plan and Chapter 13 bankruptcy where you will repay a percentage of your outstanding debt over a 3 – 5 year period. Most creditors would prefer to work out a plan on behalf of a customer then to have them file for bankruptcy. The philosophy is 40% of something is better than 100% of nothing.
Debt settlement or debt negotiation is an honest and effective alternative to the above mentioned options. The process helps you manage your debt and pay it off in a shorter time period than the other options mentioned.