In today’s weak economy, the debt of consumers is only continuing to rise. Whether from illness, unemployment or overspending, managing finances can be very challenging for many people. Debt is just simply a part of life, but if you have too much of it, life can be hard.
Two popular solutions for providing relief include debt settlement and Chapter 13 Bankruptcy. These two solutions have become very popular because of their advantages that are related to decreasing payments and reducing total debt balances. Both of these options help consumers to improve finances as well as provide relief from creditors.
DEBT SETTLEMENT
This is often a better choice for consumers than filing Chapter 13 and for many reasons.
- It doesn’t drastically hurt your credit score like Chapter 13 does.
- A court trustee monitoring income and expenses in not required with debt settlement.
- Property does not have to be attached to be able to qualify for the program.
- It can possible save you more money.
CHAPTER 13
Chapter 13 bankruptcy is a personal bankruptcy where debt is restructured to pay off most or all debt within a 3 to 5 year period. During this program, the consumer is obligated to turn over all disposable income they have available to the courts until all debt is completely discharged. Since 2005 when new bankruptcy laws were changed, more consumers are being made to file Chapter 13 and not Chapter 7 where all debt is eliminated.
Either program chosen is going to be the choice of the consumer. Which one is best? While both programs will help you get your finances back under control and life back in order, it’s vital that you make a prudent and thorough research of the pros and cons of each program. Don’t let your hardship cloud your judgment. If you’re unsure, talk to a trusted and reputable debit counselor before making any decision.
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