Credit Advice And Bankruptcy—which One Is Right For You?

You're in debt, but your creditors keep calling you. Looking for credit counseling or filing for bankruptcy? Here are some things to consider: One of the benefits of credit counseling is that credit counseling agencies work with debtors to persuade them to reduce or waive interest and late fees. After that, you pay a lump sum to the agent every month, and the agent pays the creditor. Sounds easy, right? Unfortunately, not all cases are so simple and go according to plan.

Percentage breakdown

According to the National Credit Counseling Foundation, about one-third of people who receive credit counseling are able to manage their own finances afterward. This means two-thirds were unable to manage their finances. If you have too much debt, your income is too low, or you suffer from an addiction like gambling or alcoholism, you may find yourself in debt again, seek counseling, and still be better off than before. It does not mean.

If you have too much debt to seek credit counseling, filing for bankruptcy is an option. Although credit counseling is confidential and bankruptcy is not, Chapter 13 (which includes debt consolidation) may still be a better option for many people. In Chapter 13, interest on your debts is suspended, and a court-appointed trustee collects monthly payments from you to pay your creditors. The planning period is 3 to 5 years. At this point, your debt will be paid off. If, for some reason, you are unable to pay the trustee in full, you can proceed to Chapter 7 (liquidating assets). Ultimately, you have to choose the option that keeps you going and helps you get back on track and stay there.

Both options are available in many places. 

Fortunately, many credit counseling agencies offer bankruptcy counseling in addition to credit counseling. If you are interested in credit counseling, some recommend attending a bankruptcy counseling session to understand all your options. If you find yourself in a situation where you're considering your options, it's a good idea to consider all your options.

Article Source: https://boostarticles.com

Join Us: https://boostarticles.com/signup