Debt Settlement or Bankruptcy - Which Is Right For You?

An alternative to bankruptcy is a debt settlement program. With the economic crisis brewing all around us, who hasn’t considered bankruptcy? Before doing anything further, keep reading. Debt settlement is a valuable option for those who are in dire straits financially. You are not alone and this article will explain the way to become debt free.

The first thing you need to do is to get organized with all of your bills. For some people this is rather difficult, because of the fear of how bad off you are. If you haven’t paid any of your bills lately, whose knees wouldn’t shake? Go ahead collect all of your bills, and lay them out, including your monthly payments. This unopened pile is called your monthly expenses. Go ahead open them all. Make a list of the total balance on all of them and include the credit card interest rates, then total those numbers. This number is what you owe. Next write down your total monthly income. Don’t panic keep reading.

It is understandable that when living from paycheck to paycheck, that when something out of the ordinary goes wrong, like the cost of a new tire, or a medical emergency, puts you in a tail spin. Everyone has a story about the unexpected. So when reviewing your monthly expenses, compared to your income, are you paying out more than what is coming in? Read below, and ask yourself, and be honest, how have you been handling this crisis?

1. Have you made only the minimum payment on your credit cards each month
2. Are you near the limit on your credit cards
3. Have you applied for more credit cards in the past year
4. Have you started charging small items or essentials like food and gasoline
5. Have you recently paid a monthly bill using a credit card cash advance
6. Are you late in paying some or all of your bills and if so how often does that happen
7. You are not clear as to how much you owe your creditors
8. Are you getting past due notices from your creditors and annoying phone calls from creditors
9. How dependent are you on credit cards
10. You don’t have a budget in place

    Be honest, how many yes’s did you admit to? Well there is a solution and it’s called debt settlement. The question is are you in need for a debt settlement company? Or you can deal with this crisis on your own, and a lot of people do.

    However, most people have needed help, or just didn’t want to deal with it, and for a percentage they allowed a debt settlement company to settle for them. Now if you do this yourself, it is going to take a lot of time and energy, but in the end you would have saved a lot of money. Before you consider this understand that your creditors will say and do almost anything to get you to pay them, pronto. So do your homework and know what you are getting into if you want to deal with the credit card companies. This means know the law concerning your rights, and what the creditors can do and can’t do to you, even if it’s illegal. Do your homework at debt forums were people are more than welcome to help you with this.

    Is it better for you to go with a company- this is up to you. A debt settlement company will have you set up on a budget, to add funds to an account on your behalf, and let your money build while they do the negotiating for you. By letting the debt settlement company work with you, they will deal with the creditors, and you won’t have to. During this process, you still might receive calls from your creditors, and if this should happen just tell them that you are working with a debt settlement company now and give them the company number and hang up. Remember that the debt settlement company will work for you and get you the best settlement. They will help you to get your budget under control, and have you paid off sooner than any other method except for bankruptcy. The settlement company will work for you in getting you the best settlement possible. Your budget will fit your needs, and have you paid off quicker than any other method.

    You might want to ask the debt settlement company can this affect your credit score. The answer is yes, but not forever. No matter which of the debt solutionprograms you choose, your credit rating will suffer. But if you have answered yes to the questions above, then your credit rating has already been hurt. When you first sign up with the debt settlement company your score will go down until some of the debts are negotiated and paid off. When your are finished with the debt settlement company, and your debts have been paid in full, your score will go back up and you will be back on your way towards getting your credit rating back to normal. By staying on course, your credit rating will go up again within a year, whereas if you had filed for bankruptcy, your credit score will take as long as ten years to recover.