By Richard Haws
Legitimate debt relief options are available in the market which has outpaced the traditional method of bankruptcy filing. Bankruptcy has a number of negative impacts which cause future financial troubles for the consumer. There is no doubt that the consumers can eliminate the debt completely but the negative impacts are way more complicated and bring down unexpected troubles for the consumers. The bad aspects of bankruptcy are mentioned below:
• The first hurdle that a consumer needs to overcome is that he or she has to qualify for bankruptcy. The amended bankruptcy laws have made it difficult for the consumers to file for bankruptcy at their will.
• Once a consumer files for bankruptcy after crossing the first hurdle, they will eliminate the debt completely only to face future financial troubles in form of loss of credibility and reduced credit score.
• The report of bankruptcy filing shows up on the credit history for a period of 7-10 years and during this period the consumer is not allowed to borrow further credit from any creditor even if the person is in dire need of money.
This explains why bankruptcy filing is not the best option. The best thing that a consumer can do is to go for a debt settlement deal. Settlement does not only eliminate debt but also avoids the negative impacts of bankruptcy. For debt settlement to work, the consumer needs to have an overall debt of $10k or more and must have that debt consolidated in one single credit card which has the lowest rate of interest. Once these conditions are satisfied, the consumer needs to hire a professional settlement company. The negotiator from the company will advise the consumer not to pay the creditor in order to prove that the debtor is in serious financial trouble.
Once the consumer stops the payments, the creditor waits for a period of 12-16 weeks and then sells off the debt to a collection agency at a price of 20-30 cents on each dollar. The negotiator then contacts the creditor and offers a better rate of 40-50 cents on the dollar. The creditor finds it attractive on the grounds that the deal will mean 100% ROI for the collection agency and readily agrees and ultimately eliminates at least 50% of the debt. Thus debt settlement, which is one of the legitimate debt relief options, is the best way to get out of debt.
If you have over $10,000 in unsecured debt it may be a wise financial decision to consider a debt settlement. Due to the recession and overwhelming amount of people in debt, creditors are having no choice but to agree to debt settlement deals. To find legitimate debt reduction help in your state and get free debt advice then check out the following link. [http://www.freedebtsettlementadvice.com]Free Debt Advice
Article Source: [http://EzineArticles.com
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