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Debt Settlement Services Vs Filing Bankruptcy - Why Debt Settlement Can Be More Effective Than Bankruptcy

 

 

 

 

Debt settlement services have a great role to play in the present world. They help the consumers reduce the unsecured debts in a legal manner. The settlement process is very effective in case of consumer debts as it eliminates more than half of the total amount. This is done through a legitimate firm working under the relief network. There are many options available which can be availed by the borrowers so that they can get rid of their unsecured liabilities in a quick manner.

 

The most important thing is that you should make payments to the relief firm on the agreed terms because if you make payments then the chances of getting a good deal are high. The other factor is that the outstanding debt should be reduced by more than 50 percent. If your creditor does not accept the settlement offer then you should hire a Debt Settlement services. They will negotiate with your lender on your behalf and convince him to reduce your outstanding debt by extending the term of repayment. In this way, you can be free from debts easily.

 

This is the reason why many people are using the debt settlement services for getting their outstanding debt forgiven. There are many reasons for this. One being that there is a risk of the creditors accepting the settlement offer and then proceeding to pursue collection of unpaid amounts. Secondly, there is no guarantee that you would get a decent rate of discount because the creditors may also consider other factors like the repayment pattern of the consumer. So, if he has not made any payments previously, then the creditors will surely try to recover the amount which they have lost.

 

It is advisable to consult a legal adviser before hiring Debt Settlement services. A professional adviser will tell you how to handle the situation legally. It is better to get a credit counseling agency instead of an individual. These agencies will provide all the required information about your rights and liability reduction options.

 

Once you start making payments through a debt settlement company, you will automatically stop contacting the creditors or taking them to court. They will simply accept the deal, which was arrived at between you and the settlement company. You will need to clear some doubts in your mind like - do I have enough assets to repay my creditors? Do I have a regular income stream?

 

When it comes to deciding between bankruptcy or debt settlement, it is always better to go for settlement. On one hand, bankruptcy will leave a negative mark on your credit report for years while the later will help you get rid of debts very quickly. Even the most established big businesses will not consider taking any risk on a client who is planning to file for bankruptcy. Finally, the benefits of debt settlement over bankruptcy are not easy to deny. Consumers have more chances to restore their financial soundness when they hire a legitimate debt settlement company instead of bankruptcy lawyers. Learn more, go to https://www.encyclopedia.com/economics/economics-magazines/personal-debt-0.