Anyone considering bankruptcy should first look into Debt Settlement. Also known as Debt Negotiation, debt settlement is an aggressive way of lowering your debt, and is usually done by professionals on your behalf as it requires patience, stamina, and expertise. Debt settlement companies implement a strategy to lower your overall debt by negotiating with your creditors using your extreme financial hardship as leverage. Most creditors will agree to being paid "pennies on the dollar" rather than get nothing at all - which is what would happen if you file for bankruptcy.
In the short term, debt settlement advisors usually instruct clients to stop payment on all creditors. Instead, you would schedule regular payments to put your money into a savings account managed by the debt settlement program. This savings account will grow until it reaches the right amount and can be used to pay off your debt in a lumpsum settlement payment (which is usually about 50% less than your original debt obligation). This strategy can have some short term negative effects on your credit rating, but in the end, successfully paying off your debt WITHOUT filing for bankruptcy, will be worth it.
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* Debt Basics is not a lender or broker. We provide information and research on debt help and debt consolidation. Product and service offerings differ by state.