Many people are steeped in debt and there are many reasons that people are in debt. Some of the most common reasons are: not being able to manage their finances carefully enough, losing a job through redundancy, becoming a single parent due to divorce or being diagnosed with a serious illness.
Regardless of numerous reasons the fact still remains that there are rising numbers of people filing for bankruptcy.
Once an individual is declared bankrupt, they will find it much harder to obtain credit in the future.
Although bankruptcy is technically considered a federal and uniform law, state bankruptcy laws do vary considerably.
There are different bankruptcy chapters that the individual should be aware of. for example chapter 7 enables people to eliminate certain unsecured debt like credit card bills, payday loans, utility bills and some personal loans.
Chapter 13 was designed to stop foreclosures repossessions lawsuits and creditor harassment. This allows the individual to repay some of their debts and also assigns a third party trustee to manage and prioritize the repayments and deal directly with the payment process.In some cases part of the debt may be reduced and eliminated.
For those who do not want to have the stigma of bankruptcy there are much better alternatives, than filing for bankruptcy, which is to enroll into a debt relief program.
Once enrolled into a debt relief program, this will have a less negative impact on credit history than bankruptcy. After assessing a case the debt relief company will advise the best course of action they will take over and deal directly with the creditors, there will be an agreed monthly repayment plan set out which is affordable by the individual, late fees and interest charges will in most cases cease. These plans only allow unsecured debts like credit cards, payday loans, medical bills, utility bills. Once enrolled into a program it is a binding agreement therefore the individual should be committed to eliminating the debt and in completing the program, which typically can take between 3 and 5 years.
This is undoubtedly a better alternative than applying for bankruptcy; consumers with a $10,000 debt or more in unsecured loans and credit cards can apply and stop the harassment of debt collectors.
Isabelle Martin
http://www.debt-consolidators.net/debt-relief.html
Article Source: http://EzineArticles.com/?expert=Isabelle_Martin
