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Filling Bankruptcy? How Did This Happen?

The common myth among many consumers is that when got deep in debt, file bankruptcy and start over once again and think it is an easiest way to get rid of debt. But this is not the case according to present bankruptcy laws it is life changing event that causes lifelong damage.

The situations’ leading you to file bankruptcy is huge debt. I often found most of my clients under overwhelming burden of debt and there are number to circumstances that cause mounting debt like loss of job, illness or divorce. Regardless of reasons, debt start mounting in form of credit card bills, foreclosures or repossessions. In addition calls from creditors often compound to the stress leading to file bankruptcy solution.

What is bankruptcy? Bankruptcy is a law brought into force with an intention to help borrowers who are distressed with debt. Any consumer who has no hope to recover his finance under any circumstances can file bankruptcy and get rid of debt. There are two chapters of bankruptcy under which you can file bankruptcy. They are chapter7 and chapter13. Chapter 7 bankruptcy allows you liquidate all your assets and pay off to your creditors like home, car or any other valuable assets. Remember that filing chapter 7 bankruptcy will make the co-signer responsible for your debt. So be careful while filing chapter 7 bankruptcy. With chapter 13 bankruptcy, you are allowed to keep assets with you and plan a repayment schedule over a period of 3 to 5 years to pay off the debt with interest being charged on it.

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If you have most of unsecured debt and trying to file bankruptcy, then here are best possible ways to get out of debt.

Debt consolidation: it is process of getting a new loan and using its proceeds to pay off the existing debt. With this type of loan you will have to pay only one payment to debt consolidation loan that help you in getting relief from dealing with multiple creditors and paying multiple payments at different due dates. With debt consolidation, you can manage to get rid of all this mess and make easy payments and mostly lower than one that you were paying before. Lower payments can be due to reduced interest rates or expansion of loan term.

Debt settlement: it is a process of settling debt with your creditors. In this process the debt settlement service provider will negotiate with your multiple creditors to explain your hardship and your inability to repay the debt. A successful debt settler will negotiates with creditors effectively and reduce the balance you owe up to 60 percent, which is huge relief to debtor, who is depressed with debt. The process of debt settlement will definitely impact your credit score to some extent but not as much as bankruptcy.

Therefore if you are dealing with financial hardship, consult a credit counselling agency or visit credtcardbankruptcysolutions.com for more information on debt relief with out affecting your future finance.
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