Debt Settlement Vs Bankruptcy – Bankruptcy Should Be your Last Resort
Debt settlement brings your debts to manageable levels with minimum damage to your credit score or FICO. Either way, you would still have done something to reduce your debt and, possibly, avoid bankruptcy. Bankruptcy should be your last resort because of the damage it will do to your credit score or FICO. Make sure you have no other debt relief options before you take the jump into a debt settlement.
One group of people that should consider any debt relief option other than debt settlement is those with really deep debt issues and haven’t tried debt settlement or other debt relief option yet. It takes a while or two to get used to debt and the relief that comes over time can shock you. Where do you start? What is the best way to handle this problem? You will know better after blundering after a while about debt.
If you have an emergency, call your lender or your creditors yourself. If you have maxed out your credit cards, sitting back and not calling will not work. When the credit card companies are trying to contact you, maybe you get a couple of calls per week about future payments, but never now. You need to be proactive when you know that future payment will be due soon, no matter if they help you now or not that they do, or if your income has taken a turn for the worse for some other reason that life does not continue. Debt Settlement Vs Bankruptcy
If you are trying to work out a debt settlement yourself with a lender or with your creditors, the process is really simple. You need to contact your debtors, set across for dinner to work out your payment schedule or for the monthly payments, and about 30 minutes or so after dinner you get the dreaded call from the debt collection agencies of your neighbors, not the creditors themselves. Of course, the debt collectors are just telemarketers trying to get their commissions and most are actually pretty harassing and insulting. The company you are trying to negotiate or settle with does not know your name. Is it your Company Credit or your home address? No, it is just a machine trying to sell some space. Debt Settlement Vs Bankruptcy
When you are attempting to negotiate yourself and your creditor offers you a settlement for 60% off, you must be very sharp throughout the conversation as to what you do not say. Most of us instinctively know that we should not agree to pay a higher amount than we can afford, but we still do. Do not get discouraged and do not get angry but Politely tell the Collection Agency that you will not be able to make the amount agreed upon right now, and list down the various charges you are trying to get rid of from the bill. This will show your creditor that you are out in money and you will not be able to pay your bill in the future. Once you have received an agreement on a lump sum payment, and your creditor is happy with the amount, make sure that you pay the money immediately. You can pay the money via any number of ways like bank account with your name as a reference when applying and mailing the transaction into the company to make sure that you get your payment in time. There is always a charge by the creditor or company when their money is transferred through any of these methods. This is why you should get your payment in good time and out of the way so that you do not give any more trouble to the creditor.