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Credit Report News, Tips & Advice « Credit Reports > Credit Report Advice > Bankruptcy is for Losers; Debt settlement is for Winners

Bankruptcy is for Losers; Debt settlement is for Winners

By Andy Snyder
Published: Thursday, November 12th, 2009

Are you “hiding” from your creditors? Do you throw notification letters and bill statements in the garbage without even reading it because you are already aware of what it may contain(threats from the legal counsels of credit companies due to your 90-day delayed payments)?Stop this embarrassing scenarios in your life. Take this credit report advice: settle your debts through an alternative called, debt settlement program or choose a loan modification scheme. The good thing is, you can choose between the two, whichever suits your budget the best.

A good credit report advice will never tell you to opt for a declaration of bankruptcy not unless it is already a matter of life and death situation. For as long as you can still save what is left of your reputation as a borrower, a debt settlement program will still prove to be the best option. When in debt, it is not only you that losses money but the credit company as well. Filing for bankruptcy will mean no income for creditors and a lot of denied loans in the future for you.

But what is debt settlement and how does it work? Instead of running away from your creditors, face them like a man, or if not a woman. Negotiate with them a payment scheme that is realistic to your budget. Meaning, you can still afford it with your salary minus all your other expenses. A credit report advice will tell you that, this way, interests will stop from accumulating, thus, will save you hundreds of dollars and will bring back what might have been a lost income to your creditors.

According to a credit report advice, loan modification, on the other hand, is simply the restructuring of loans previously agreed upon by you and your creditor. The difference between a debt settlement and a loan modification is that, the latter will “restructure” the terms you agreed on or even allow that the principal amount be the only thing you will have to pay for. Mind you, this will happen only after a thorough investigation of your case and after proving that you are already incapable of paying more. Debt settlement, on the other hand, concentrates on the amount you are willing to pay on a monthly basis.

The alternatives presented above, will help free you from the prison cell of debts. But you never will arrive to this decision-making if in the first place, you already managed your financial activities in accordance to your budget or monthly salary. Sure you need a car, a credit card among all other loans, but a credit report advice tells you that these things are loans and will pile with interests if not paid on their respective due dates. Unpaid dues will, in turn, also give you a lot of problems in the future.

It is not only the age of what they term to as “cyber world”. It is also the age of credit cards and loans. Almost every household owes one. Using these to our advantage is an advantage. Loans are “good guys”; the “bad guys” are the unpaid ones.

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