Compared to debt settlement, it is much more difficult to pay off debts by losing everything in bankruptcy.
It is a fact that if you have no assets left, the bank cannot employ any pressure tactics. However, these regulations have evolved significantly. Currently, bankruptcy is not a simple option. This option can be utilized in two ways. You can file for bankruptcy under either chapter 7 or chapter 13.
Chapter 7 bankruptcy versus debt settlement; the parameters of bankruptcy
Compared to chapter 13, chapter 7 provides loan applicants with a simpler environment.
Chapter 7 is based on the typical salary. If your salary exceeds the average salary in your state, you cannot choose chapter 7 bankruptcy. According to this chapter, you are not required to pay anything if you become bankrupt. This appears to be the most efficient option for loan applicants. However, the reality is very different. You are ineligible for loans and other forms of financial assistance.
Chapter 13 is for individuals who earn more than the state's average income. This chapter, however, is not as lenient as chapter 7. You cannot eliminate anything if you select this option. However, your terms of payment are now more flexible. This proposal is inferior to a debt settlement proposal.
Debt settlement facilitates the elimination of debts.
In terms of their respective outcomes, bankruptcy and debt settlement are vastly distinct from one another. By declaring bankruptcy, you may be able to eliminate all of your debts, but the terms are not so simple. In contrast, liability reduction has no negative impact on your credit score. Additionally, it eliminates fifty percent or more of your outstanding obligations. It is preferable to avoid bankruptcy and choose one of the legitimate debt relief options. Consult a reputable settlement network for the most effective relief organizations.""
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