These Tough Times

If you are thinking about filing bankruptcy, here are some things that you should know.

First, you should understand the different types of bankruptcy, what they mean for you, and which is the best option in your situation.

You would typically file chapter 7 bankruptcy if you wanted to ‘wipe out’ your debt instead of simply obtaining an easier way to pay it off as one would do with a Chapter 13 bankruptcy.

Chapter 7 bankruptcy eliminates debt completely, Chapter 13 bankruptcy results in a reorganization of amounts owed, interest rates paid, and the length of time over which the debts are going to be paid back.

Regardless of whether a person goes through Chapter 7 or Chapter 13 bankruptcy, their credit rating will be adversely affected for some time to come. A Chapter 13 bankruptcy remains on the individual’s credit report for seven years. A Chapter 7 bankruptcy remains on the individual’s credit report for ten years.

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Let’s face it, the very thought of confronting credit card debt head-on can be scary.

However the fact that you are perusing this article demonstrates that you’re ready to confront the problem head-on and work out a solution for eliminating outstanding credit card debt. And that is a major step in the right direction, as doing so distinguishes you from so many others that do nothing other than pay the minimum every month or worse, those who continue to rack up more debt as they dig themselves deeper and deeper into a pit of debt and despair that will eventually collapse upon them.

I know it’s scary confronting huge credit card debt, but you are not alone in all of this and no matter what, that debt is not going to simply “go away” on its own. Credit card debt is the 800 lb gorilla lurking in the closets of many of us and it is going to have to be dealt with and the sooner the better.

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With the current state of our economy and its effect on consumers, more and more people are looking at debt settlement as an alternative to bankruptcy.

In many cases those who are considering bankruptcy owing to credit card debt, medical bills, or personal loans are finding that debt settlement may be a better solution for their financial problems.

Just about any type of unsecured debt may be subject to debt settlement. On the other hand, debt settlement is not usually applicable to delinquent mortgages, liens or other secured debts.

In its simplest form, debt settlement is nothing more than negotiation with creditors in which one offers to pay off less than what is currently owed in exchange for the creditor considering the account “paid in full”.

In a debt settlement scenario, creditors are contacted either by the debitor, or by debt settlement professionals working on behalf of the deliquent debtor, and offered a reduced sum of money in exchange for the forgiveness of the rest of the currently outstanding debt.

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