Use Bankruptcy
as a Last Option
When it comes to taking care of your debts, you need to look
carefully at your options before deciding anything. You have
options, you just have to know what they are. Some people think
that if they are in over their heads in debt they have to get a
bankruptcy because they have no other option. This is simply not
the case. You can do debt consolidation, debt settlement, debt
negotiation, etc. – all of which are very valid attempts to get
you out of debt before you go to last resorts.
Debt consolidation is simply taking your existing debts and
putting them into one larger loan. Instead of paying all of
those bills every month, you simply pay one bill and use the
money from it to pay everything else off. Once you have paid off
the debt consolidation, you are now debt free. This is the best
way to handle your debt without really hurting your credit.
Debt negotiation is when you or a company negotiates the terms
of the loan that you have. Sometimes they will reduce the amount
of interest that you are paying, sometimes you will get a lower
monthly payment, etc. Sometimes this works hand in hand with
debt settlement, which is when they forgive part of your debt,
and so you only pay back part of it. This however, can hurt your
credit. If you get them to forgive an amount of debt and then
pay them off – either with or without a debt consolidation- it
can be tricky as to how it is reported. If it is reported as
paid in full than your credit will be in good shape; if they
report it that it was settled, it will hurt your credit.
However, your credit will still be better than if you got a
bankruptcy.
A bankruptcy simply says that you did not pay your bills. It
says that you cannot be trusted to pay back what you borrow, so
companies would be better off not loaning you the money.
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