Consolidate Debt And Avoid Bankruptcy

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Bankruptcy is one of those resolutions that only needs to be utilized as a last resort. There are so many ways to avoid it, most people don’t think about it. Divorce is a huge arena where people are quick to file because they don’t or can’t work things out. Instead of researching all the ins and outs of bankruptcy, many people believe it’s the easiest solution. However, there is no easy way out, which is why it is extremely important to review all your other options.

Action through Inaction

Even though there are many times where action is needed, debt problems may not be one of them. You have to know what you’re getting into and how credit companies work before you can make the best decision for your situation. Since creditors have to spend all kinds of money on legal fees just to solidify their claim, if your balance is less than what it cost, they won’t waste anymore money. If you owe a company $400 and their fees are over a grand, you might as well do nothing at all.

Out of Money

Even if you wanted to pay off your debt, is it possible that you just can’t? The truth is that any good business person knows that you cannot squeeze blood from a stone and if they are smart, they won’t even try. Consider a situation where you owe three different creditors 500 dollars, 1,500 dollars, and 4,500 dollars. The first creditor is most likely not going to take you to court for 500 dollars because that would barely cover the legal fees that they need to pay.

Another important factor here is that they can only take from certain resources. If you’re sitting there thinking they’re going to take away food, clothing, furnishings, social security, unemployment, and assistance money, they can’t. In fact, they can’t even take away from 75% of your earnings. Even if they continue to call, send them a letter stating you have no intent to pay. By law they have to stop attempting to collect.

When you reach this point, make sure that you don’t tell them anything they want to hear. For instance, it’s important to deny the knowledge of a debt when you speak with a creditor. If you don’t, then the statute of limitations will start all over and you’ll have to go through the process all over again.

Negotiating Your Debt Away

Everything we mentioned above is why creditors always want to settle out of court. Not only will they alleviate all the legal fees, they’ll be able to collect some of that debt back. This is why it is so important to have all the knowledge of the subject at your fingertips. Without it you’ll be running to the bankruptcy lawyer without even batting an eye.

Not only does this tell your creditors that you mean business, talking with a professional in this field can help you decide on the right action for you. You can tell your debt counselor that you are interested in avoiding bankruptcy and they will be able to put together a debt settlement plan for you. Remember that debt negotiation can be done informally or as part of a debt settlement plan.

There is a lot information that you might need when you want to look into debt settlement and credit counseling, and this is where you can turn to a reputable company like Nationwide Debt Solutions. There are many options open to you before you need to think about bankruptcy, so see what steps you can take to preserve your financial future.

With over 20 years in the consumer debt relief field, Daniel R. Michaelson is one of the leading authorities on approved Debt Consolidation Programs.

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