Once in an every while we receive a phone call about bankruptcy. Each time, each voice, confident and abruptly asks "Do you do bankruptcies?" My reply..."Why would you want to declare bankruptcy?" This question always follows by an extended halt, and many cliche' answers arise, "Because I want to start from scratch," or "Because I have a lot of debt I cannot repay."This is funny to me, not because I am an insensitive person, but just because how much it bothers me on the lack of financial education the general public has in many areas, including this one. I always explain, that although a bankruptcy is the "easiest solution," psychologically, bankruptcies have many implications that are far too serious to ignore.
Are you ready for a permanent (at least for 7 years) major stain on your credit report?
Are you willing to live without credit for at least 7 years?
Are you willing to pay major interest on any credit you might receive?
Did you know some bankruptcies require repayment? NO? Read on!
"So what would you suggest?" my client says with arrogance. What about debt settlement services? Difference? Well-no bankruptcy to start!
Because different debts carry different sets of rules when it comes to debt settlement, many rules are generic across the board. Say you have $100,000 in debt. 7 Credit Card Accounts in total. If you are behind in payments, say your total payment is $5,000/month, you can cut it to pennies. A Total of $100,000 debt would have a high chance of settling for 15-25% of what is owed. At best, you now owe $15,000! At worst, you owe $50,000!
Now I promised to talk about deal or no deal?
Consider many options, each option has a negative implementation. For instance, bankruptcy has the heavily stained credit report, you can ultimately forget about buying a house, leasing a car, or credit cards in general. Debt settlement has some negatives as well. Most debt settlement cases will still have late payments on your credit report. Not as serious as bankruptcy though. Debt settlement also requires you to receive a 1099 at year's end on the amount forgiven, as income.
So deal or no deal? Visit our website for more info, including government issued communication, and disclosures.
