SOURCE: United Debt Counseling

debt settlement, debt negotiation

March 24, 2010 03:00 ET

Debt Settlement or Bankruptcy: United Debt Counseling Helps Consumers Decide

FORT LAUDERDALE, FL--(Marketwire - March 24, 2010) -  United Debt Counseling (UDC), founded in 2001, has a financial team with more than 20 years of experience in creditor relations, negotiations, settlements, arbitration, financial literacy, and counseling services.

Having trouble with your credit card bills? Trying to decide between Debt Settlement versus Bankruptcy? Two of the most probable options available to people seeking debt relief are bankruptcy or debt negotiation. With the economy struggling to recover from a recession and unemployment numbers at an all time high, people are facing the reality that they may need debt settlement or bankruptcy in order to survive. Debt is a part of most people's lives, but having too much debt can make living an enjoyable life difficult.

There are two potential solutions to resolving an unmanageable debt problem. One may be filing for bankruptcy, but perhaps a better alternative would be using a debt settlement company. Before committing to either of these options, it's important to know the pros and cons of using a debt settlement company versus filing for bankruptcy to resolve your debt situation.

The decision to file bankruptcy is one that must be thought through thoroughly. The lasting negative effects can limit financial options and the ability to obtain future credit. Bankruptcy often carries long term derogatory effects on credit scores, financial management and understanding from future lending sources. There are different types of bankruptcy, each having its own guidelines and limitations.

Though bankruptcy may be a very good solution to a severe debt problem, filing carries negative effects that follow a debtor for a relatively long period of time. The debtor may lose property that is non-exempt (unprotected) and have to start over again in fulfilling their lifelong goals. Bankruptcy will appear on your credit report for seven to ten years depending on which type of bankruptcy is filed. Chapter 7 will normally be reported for 10 years because it does not involve any form of repayment plan to creditors and debts are completely discharged. Filing Chapter 13 may carry less of a dishonor and usually remains on your credit report for 7 years because the debtor arranges to repay a portion of the debt.

Debt Settlement is a proven successful approach to debt reduction. This may be appropriate for individuals with a serious amount of debt or who are considering bankruptcy. A Debt Settlement Company negotiates with creditors to settle debts for a lower amount than owed. This is accomplished by the debtor saving money for a lump-sum settlement payment. After the debt is settled, the creditor will send a letter stating the debt obligation is fulfilled. The same information is reported to credit bureaus in one of three ways:

  • The debt has been "Settled for less than full amount"
  • The debt has been "Paid"
  • The debt has been "Settled"

Term settlements are settlements where creditors allow us to make monthly payments on the client's behalf. This is normally done for large debts where although there is a substantial savings, it is too much for the client to make in a lump sum. Basically a payment plan. Normally 6 months or so.

To learn more about United Debt Counseling financial contact them at 1-800-665-9981 and one of our Certified Credit Counselors will review your individual financial circumstances and will recommend one or more programs that can provide the solution and goal you are looking for.

Contact Information

  • Contact:
    Stuart Lieberman
    1-954-545-6160 ext 1126