When you realize you cannot meet your monthly debt payments with your limited salary you have a choice to make. The question looms large as to debt settlement vs. bankruptcy.
Know Your Debt and Income
Before selecting bankruptcy or debt settlement take stock you all your debt. First get a copy of your credit report and review it carefully for any errors. Determine what your FICO or credit score is. Next add up your entire debt showing on your credit report. Determine your total monthly income including overtime and bonuses. Add to this list your monthly living expenses such as groceries, tuition, electric and heat, insurance etc... Now subtract these common living expenses from your monthly income and then subtract your monthly debt payments from the remainder. If you have a positive balance then you are actually in good shape. If you get a negative number you will need to consider putting together a settlement vs. a bankruptcy.
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Should I Choose Debt Settlement?
To determine if you qualify for debt settlement look at all your debt that is not secured by collateral. You will usually need at least $7,500 to $10,000 in unsecured debt to consider for this type of settlement. Next do your homework and locate a professional debt settlement company. Compare companies, especially the fees they charge and ask for references. Carefully review the debt settlement schedule and determine how it will affect your life. Keep in mind that your creditors can still call you for payments or serve you with lawsuits for non-payment of debt.
Should I Choose Bankruptcy?
First determine if you qualify for bankruptcy as the U.S. bankruptcy code was recently updated. Understand that there are fees paid to the court for filing bankruptcy. In addition a bankruptcy attorney will charge his or her own fees. Keep in mind that filing bankruptcy will not rid you of all debt. The court might decide you are still responsible for part of your debt. In addition, a bankruptcy will stay on your credit report for 10 years while other bad payments on debt usually only last on a credit report for 7 years.
Deciding on debt settlement vs. bankruptcy can be a very difficult decision. Be sure to do your research and then consult with experts in both avenues to help you decide which option will work best for you.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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