When to declare bankruptcy and when to choose debt settlement - a debt relief comparison
When to declare bankruptcy and when to choose debt settlement - a debt relief comparison
When to declare bankruptcy and when to choose debt settlement depends on several factors. A consumer needs to clearly distinguish among these factors and then decide on the step to be taken. This means that the consumer needs to aware of various aspects of bankruptcy and settlement and also needs to be conscious about the income opportunities and the scope of stability for such opportunities. Additionally, the consumers need to know about the current laws and policies which play an instrumental role in deciding whether to go for bankruptcy or debt settlement. Let us find out the same!
Choosing Debt Settlement:
Choosing debt settlement is a wise thing to do but there are several conditions which the consumers need to follow. These conditions are set by law or are just the basic requirements without which opting for debt settlement is not possible. These are mentioned below:
For debt settlement, a consumer need to have a consolidated unsecured debt of $10,000 or more. The benchmark of $10,000 has been set by the government and this means that the consumers cannot opt for debt settlement if the debt is below $10,000. The debt can be more than that amount.
For debt settlement to work, a consumer needs to have a constant income flow so that he or she can arrange for the bulk payment that is to be made at the end of settlement. In settlement, as we all know, the creditor agrees to wipe off a certain percentage of the debt and the remaining amount of the money is to be given to the creditor in lump sum. So, if the consumers do not have ample money or a necessary income source to arrange for at least 50% of the debt, the process becomes meaningless. Also, the consumer needs to understand that there will be a fee of negotiation involved in case the consumer hires a professional settlement company. This means that the income flow needs to be present and it needs to be consistent.
Choosing Bankruptcy:
Choosing bankruptcy will be a wise decision in case the consumer does not have any income source or in case the consumer has an income which is not sufficient to cover the minimum expense level defined by the law. This is because, the major bankruptcy clause states that if a person's income level is not sufficient to cover the expenditure level defined by the government, which is required for a modest lifestyle, the consumer will be allowed to file for bankruptcy. This is known as means test. This means that the consumer needs to clear means test in oder to file for bankruptcy. If not, the consumer will not be allowed to file for bankruptcy.
So, depending upon the situation, the consumers need to select wisely to ensure that the decision taken is wise.
Debt settlement is a viable option to filing bankruptcy and is becoming increasingly popular amongst Americans with over $10k in unsecured debt. Creditors are ready to negotiate. You can literally eliminate 50% of your unsecured debt with a settlement. Ski Accommodation That Allows You To Relax And Have Fun For A Great Cost Ski Accommodation That Helps You Relax And Have Fun For A Great Price Celebrities Cheering other Celebrities Phuket tourism increasing despite strong Baht Learn About History Of Hamedan Before You Travel To Iran Christmas Gift Ideas! Web CEO Review & Web CEO: Holiday Offer Christmas and Gift Buying Holiday Checklist - What To Pack Re-Live the warmth of Christmas in a unique way!! India Travel Packages Holiday 2011: This Year's Top Three Holiday Destinations Engravable Christmas Gifts For The Recipients To Personalize the Occasion