Need To Make A Decision About Resolving Your Debt Problem?
In Credit Repair of CreditGuru (February 23, 2009 3:09 pm)
Is debt relief a good choice?
Okay. You finally have come to the realization that steps must be taken to address your enormous debt situation. Which is the better move….debt relief or bankruptcy? Now that you know you must take proactive steps to correct the situation, be honest about how you got into this situation in the first place.
Are you an irresponsible spender, impulsive shopper, bad money manager, or all of the above? Or, are you a victim of circumstances, laid off from your job, burdened with unexpected medical expenses, or perhaps your business is in trouble? Where you stand, as far as the circumstances that put you in this position, may dictate where you seek assistance.
For those who have found themselves drowning in debt because of the state of affairs of our current disastrous economy, debt relief may be your best remedy. If there has been no interruption in employment, and no unexpected emergency debt, this is the best choice for debt settlement. A credit counselor or financial professional will talk with your creditors, explain your situation, and settle your debts by means of lowering your payments, lowering your interest, and stretching your payments over a longer period of time. Sometimes, the creditor can even be convinced to lower the total debt owed. This payment arrangement takes commitment on the part of the debtor to be sure payments are made on time and without fail. In this way, once the debt has been satisfied, and stamped “paid in full”, the individual is in a better position to seek future credit.
When is Bankruptcy the best choice?
In actuality, bankruptcy is never the best choice, but sometimes the only choice. Bankruptcy is often regarded as a financial “black mark” on an individual’s credit record and not the preferred method of erasing debt. However, in cases where there has been irresponsible spending and poor money management, in addition to lost employment, and it can be proven in court that there is not nearly enough money coming in to pay off the debt, bankruptcy may be the only option. It is a very involved and detailed remedy, however. Every asset of the individual must be inventoried and its worth tallied. But, it must be remembered that Bankruptcy is an “undesirable” mark on one’s credit record, and will take as much as 10 years to be removed from that record. So, by all means, consider every other form of assistance to get relief from debt before deciding to go bankrupt.
You will ultimately feel much better about yourself if, in some way, you can repay your debt through a debt relief program. Besides being the “right thing” to do, it restores your credit to a financially worthy position once the debt is paid off. Bankruptcy debt relief is a very irresponsible action, and should only be pursued as a last resort.
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