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Alternatives to Bankruptcy

Alternatives to Bankruptcy
"""If you are experiencing financial difficulties and contemplating bankruptcy, it would be prudent for you to attempt to avoid bankruptcy. Personal bankruptcy can ruin your credit. And despite the fact that many consumers have been able to recover after filing for bankruptcy, the bankruptcy will remain on your credit report for 7 (Chapter 13) to 10 (Chapter 7) years and on your public records for 20 years. What are your choices then?

It depends on the type of debt, state laws, and whether or not your creditors are willing to work with you. If you owe more than $10,000 and your creditors are willing to work with you, then debt settlement and payment plans are options. If your credit is still in good standing or if you have available equity in your assets, you may be eligible for a debt consolidation loan that can reduce your monthly debt payments. Attempting to avoid bankruptcy is the best solution for your difficult situation.

With debt settlement or payment plan options, you can negotiate with the lender to be able to continue making principal and interest payments on the outstanding debt. The options available with a debt settlement agreement include the lender adjusting the outstanding principal and taking an instantaneous partial loss, as opposed to a likely total loss in the case of bankruptcy. Alternatively, you may be able to negotiate a lower monthly payment and a payment schedule that suits your budget. In this situation, the lender can reduce the interest rate or extend the term of the debt, thereby reducing the payment.

With a debt consolidation loan, a lender essentially provides you with a loan to pay off multiple debts over what is likely to be an extended period of time. Typically, these debt consolidation loans are secured with collateral in the event of a future bankruptcy petition. The terms or duration of debt consolidation loans are typically between 10 and 20 years, and the interest rate is determined by your credit score.

By attempting to avoid bankruptcy, you have the chance to keep your credit score from suffering a significant hit. By filing for bankruptcy, not only will your credit be negatively impacted, but you will also have a mark on your public record that can work against you, as well as lose the ability to finance a car, obtain a credit card, or obtain a mortgage in the future. It is best to work with your lenders to negotiate the best repayment plan that benefits both parties.

" - https://www.affordablecebu.com/
 

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"Alternatives to Bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 107 times and generated 0 comments. The article was created on and updated on 02 June 2023.
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