Finding the Right Financial Solution for You

Debtors’ prisons are a thing of the past, but  we all live in themwhen we struggle to make our minimum payments, use credit to pay bills,and juggle our payments.  We don’t feel free to live our lives, and wemay even live in fear – of creditors’ calls, threatening letters, andimpending judgments against us.  While it may seem very bleak to you,there is assurance in knowing that there is a way out.  There are twoimportant keys to getting out of debt :  finding the right solution and starting now. When they owe thousands, or even tens of thousands of dollars tocreditors, many people assume that their only way out is through thedifficult process of bankruptcy.  And for some, unfortunately, this maybe true.  However, for many of these people, another option may offer aroute out of debt that is smoother, a bit easier, and reestablishes asense of control over their financial lives.  Debt settlement is aprocess through which your total debt is reduced, and you work to makemonthly payments and pay off creditors in full.  Which is right for you? There are two different types of bankruptcy for individuals: chapter7 and chapter 13.  In chapter 7 bankruptcy, a person’s non-exemptassets are liquidated and the funds used to pay creditors.  Non-exemptproperty can include a second or vacation home, bank accounts, bonds,valuable items, including collections, a second vehicle, and otheritems of value.  Those filing for chapter 7 can keep reasonablynecessary clothing, household goods, and furnishings, pensions,personal injury awards, public benefits, and tools of his trade,jewelry, and vehicles to a certain value. Chapter 13 is also called reorganization bankruptcy.  In essence,your debts are reorganized by the court, and you have three to fiveyears to pay them off.  Many opt for chapter 13 because they do notqualify for chapter 7 under new laws or they have non-exempt propertythey want to keep. If you would like to file chapter 7, whichessentially eliminates your qualifying debts, you must pass theBankruptcy Means Test, which takes into account your current incomelevel, family size, etc. In either method, your debt is handled in a legal manner, and youare required to receive credit counseling before filing.  This can behelpful because you explore other options and can learn valuable tipsfor managing money and debt more healthily. However, there are drawbacks to the bankruptcy process.  The firstand most obvious is that your credit score suffers tremendously.  Abankruptcy stays on your credit report for at least seven years. During this time, it is exceedingly difficult to obtain good credit. If you do get a loan or mortgage, you will be unfavorably high interestrates and may not qualify for the full amount for which you ask. In addition, because of new, more complex bankruptcy laws, manypeople need to hire a lawyer specially trained in this area of thelaw.  For people struggling with debt, this is a burden to say theleast.  Another reality of bankruptcy is that it is one of the moststressful events a person can go through in his lifetime.  It is on thetop ten biggest stressers list, in the category of losing a spouse,losing your home, etc.  It is very difficult on your mental health,very stressful, and very trying for your whole family. For your sanityalone, it may be well worth it to explore an alternative. Debt settlement isonly similar to bankruptcy in a few regards:  you do have a way tohandle your debt, and it is a legal process.  Beyond that, the two arevery different.  Debt settlement offers a way to escape debt withoutthe tremendous burden of stress and attorney bills that can accompanybankruptcy.  In a reputable debt settlement, or debt negotiationprogram, you make a monthly payment into an escrow account which isspecifically reserved for paying your creditors.  One at a time,settlement specialists negotiate with your creditors to reduce theoverall balance that you owe.  For instance, a $10,000 credit card billmay be slashed to $5000, or even less. You then pay that creditor in full as soon as your escrow account assufficient funds.  You cross that one off the list, and the specialistsmove on to the next.  In this systematic manner, all of your unsecureddebt can be eliminated. While your credit score does initially dip, it ultimately is healedby your efforts because creditors are being paid in full.  When youwork with a program like this, you can be debt free in a matter ofthree to five years.  Free of debt.  Did you ever think that waspossible? It can be when you choose the right road.  Debt settlementwill get you there.  Start now so you get out of that prison. Learn about debt settlement, debt consolidation, debt relief, and more at Impact Debt Settlement .

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