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Anyone who is stuck deep in debt at some point will consider the process of going bankrupt. The majorities of debtors are unaware that there are alternative plans to getting out of debt and will throw in the towel when they feel overwhelmed by their debt situation and file bankruptcy.
Being stuck in debt, especially credit card debt, is very stressful, overwhelming, and for many depressing. Many people get to the point of feeling suffocating by their financial situation and think the only option they have to alleviate their debt problems is to file for bankruptcy.
What most people also don’t know is how long lasting of an effect on their lives bankruptcy can have. Not only will it destroy one’s credit for the following 7-10 years but it remains a matter of public record for the rest of that person’s life!
Fortunately there are some very viable debt relief plans that can help people to avoid a personal bankruptcy; both Chapter 7 & Chapter 13. The two most commons plans are debt settlement and credit counseling.
Credit counseling offers benefits of one monthly consolidated payment and lower interest rates. One of the main benefits of credit counseling is that you will be debt free within 5-6 years, and save a lot of money on interest. However for many people that are seriously stuck deep in debt credit counseling may be too expensive to afford.
In most credit counseling programs the monthly payments are very close to what one may be putting out towards their monthly minimum payments; therefore not giving the debtor to much of a break in their monthly budget.
Debt settlement is for many the most viable alternative to filing for a personal bankruptcy. The main benefits of debt settlement are getting out of debt very quickly, typically 2-3 years, and saving a lot of money on the balances owed, typically 40-50%!
Credit card debt settlement programs are hardship programs designed for people who are truly struggling to maintain paying their bills. With this type of plan negotiations will be taking place to drastically lower the amount owed on the actual balance, not the interest rate like a credit counseling plan. Therefore much more money is actually saved in the long run. Debt settlement however is not all peaches and cream, and not all debt settlement companies/programs are the same.
There are certain criteria that that can make a debt settlement program much more beneficial for the debtor, click here to learn more about consumer friendly debt settlement programs.
If you are someone stuck in debt and considering bankruptcy then you should first explore all other options before going bankrupt. Click here to fill out an application to speak with a debt counselor who can help guide you in the right direction and help you potentially save a lot of heartache and frustration in the future.