You may find yourself in a financial state that makes you consider seeking outside help. However, you may believe your situation is too minor to do something so drastic as declaring bankruptcy. For this reason, debt-relief alternatives are at your disposal, such as a debt settlement plan. Follow along to find out the pros of debt settlement over bankruptcy and how a proficient Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help weigh your other debt-relief options.
What are the benefits of a debt settlement over a bankruptcy filing?
First of all, debt settlement may require you and your creditor(s) to sit down and negotiate a reduced payment amount for your owed debts. This means this option may only work if your creditor(s) are willing to negotiate. And even if they do agree to negotiate, this may take months or even years to resolve.
Still, there may be great benefits that a debt settlement plan has over a bankruptcy filing. For one, even though your debt settlement incident may remain on your credit report for seven years, it may be less impactful than a bankruptcy incident. That is, it may be less likely to derail your plans of purchasing a home, starting a business, or anything else requiring significant loan backing.
Secondly, requiring outside help for your debts may not be your proudest moment. So you may prefer a debt settlement plan just because it is handled privately rather than involving the Kentucky bankruptcy court system.
Lastly, you may be confident that your steady stream of income and your total earned income can let you easily fulfill the reduced payment amount negotiated in your debt settlement. That is, bankruptcy is more catering to individuals whose income makes it almost impossible to meet their debts.
What are other debt-relief options besides bankruptcy?
If neither debt settlement nor bankruptcy seems fitting for your current financial situation, you may rest assured knowing that even more debt-relief options are available. Namely, there is debt consolidation and credit counseling.
With debt consolidation, you may combine your debts into one account to make your payments more manageable and affordable. Specifically, this may be done by taking out a personal loan, a home equity loan, a home equity line of credit, etc.
Then, with credit counseling, you may meet with a counselor to analyze your debts and figure out how to use your income to pay them off. Specifically, this may involve creating a budget, establishing payment agreements, or setting up a debt management plan.
To allow the best decision to be made, it may be in your best interest to retain the services of a talented Louisville, Kentucky consumer bankruptcy lawyer. Contact Schwartz Bankruptcy Law Center today.
