Bankruptcy and the big question: Other debt-relief options

February 7, 2012 by
Filed under: Bankruptcy, Debt Management, debt relief 

Though it is true that bankruptcy provides you with that fresh start, you should consider the other debt relief options before filing bankruptcy. Bankruptcy can help you discharge almost all of your debts but at the same time it hurts your credit too. As a result, it becomes hard for you to get any form of new credit after the discharge of bankruptcy. So, it would be best for you to consider how to become debt free without you having to file bankruptcy.

Other debt relief options

It is not only bankruptcy that can help you to get out of debt. There are also other options that you can use so as to become free of the debts that you have incurred. Some of these options are:

  1. Debt repayment options – In case of debt repayment, the terms and conditions of your payment process gets changed. When you are in some financial crisis and if you have always been making regular and on-time payments, the creditor may agree to your re-payment request. It helps you to pay off the debts that you have.
  2. Debt settlement – Debt settlement is the option through you can get the outstanding debt amount lowered. That is, when you request the creditor for settling your debt, an amount of the debt gets forgiven. Thus, it becomes easier for you to manage and pay off the debt. However, you will be able to settle the debt only if you have missed payments on it.
  3. Debt consolidation – In case of debt consolidation, the number of debts that you have gets consolidated as a single debt. In addition to this, the interest rate on the debt gets reduced too. This makes it easier for you to manage the payments as after consolidation you are required to make a single monthly payment. However, unlike debt settlement in debt consolidation, you are not required to miss payments.
  4. Debt management – Debt management can help you to pay off your debts. If you are planning to manage the dues and bills of your own, you will be required to list down the debts that you have and work on that to pay those off. However, if you go to a third party for help, you will be required to enroll in a debt management program or DMP. In a DMP, the counselor negotiates with your creditors to lower the interest rate on your debts.

So, here are the different debt relief options that you can avail of in order to pay off your debts. This can help you to avoid hurting your credit the way it does if you file bankruptcy.

Post to Twitter

Comments

Tell me what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!