A Viable Alternative to Bankruptcy

If you're carrying thousands of dollars in credit card debt, struggling to pay the rent every month and getting calls from collections agencies, you might be considering bankruptcy. Yet for almost all circumstances, a good financial advisor will tell you that's the last thing you should do.

Once you declare bankruptcy, there are many unpleasant implications. Not only do you lose control of your assets and have your dignity taken away, but when the debt is finally paid off, it will be very difficult to obtain credit again. Bankruptcies remain on your credit report for 10 years.

Despite the negatives, there were 2,078,415 filings last year --- 2,039,214 among individuals, 39,201 by businesses according to the American Bankruptcy Institute. The numbers are expected to be a lot lower this year as a result of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, signed into law last year. The Act limits the scope of relief a filer will receive, as MOST debts have to be repaid to creditors. In most cases, Chapter 7 bankruptcy (full relief) has been eliminated and the individual will have to file for a Chapter 13. Yet Chapter 13 bankruptcies still make you pay back 100 percent of the principal.

So what are your alternatives? You can take out a debt consolidation loan, which is where you borrow a sum of money against your home and use the extra equity to repay old debts; but these often lead to more problems. Statistics show about 70 percent of people who choose this option end up in even deeper debt within two years.

Since Chapter 13 is a horrible option for almost everyone, a more viable option is debt settlement, the consumer equivalent of a business hiring a turn around specialist to help them settle their debts with creditors and get the company back on track.

"Any person owing credit card debt, or any other debt, has the legal right to negotiate with creditors; however, this practice takes time to master and certain skills to get the maximum benefit. It would be in your best interest to turn to the experts for help," says Jamie Greene of Debt Settlement of America, Inc., a company that has helped hundreds of people out of financial difficulty over the past 7 years.

Once they get involved, the company's negotiators will review your bills, create a plan, then negotiate with your creditors to obtain the best settlement possible (their settlement officers typically negotiate the debt down 60 percent), and work with you to determine an affordable low monthly payment to put towards your debt settlement fund.

Why choose Debt Settlement of America? They are the only company that does not charge any enrollment fees. Plus, the way they make money is when they save you money. Your risk is minimal with them. All of the other settlement companies charge up front for their services. Of course it is more difficult to get into their program as they are strict in whom they enroll. The only way to find out if you qualify is to go to their Web site.

Ready to get started on a road to recovery that won't leave a 10 year blemish on your credit report, log on to www.debt-settlement-america.com and fill out a quick form. A debt specialist will follow up with a free consultation.

Copyright © 2006 ARA Content