Someone who has several thousand dollars in debt may considering filing for bankruptcy as a solution to his problem. This may or may not solve his overall problem but it will stay on his credit rating for over seven years. If someone wishes to avoid filing for bankruptcy in Federal Court he may decide to contact a debt settlement company. Such companies are often run by the credit card companies themselves and they do not always operate in the best interests of the consumer. A person who carries a high amount of credit card debt will probably welcome an intermediary who can negotiate for him. Such a person will want to make sure he times the rate company to represent his interests. Usually this refers to a nonprofit organization were a lawyer who specializes in this particular field.
Even a person who files for bankruptcy may find that he still needs to go through a similar process. Federal courts demand that an individual pay back the money he owns as long as it is possible. Court proceedings usually set up a payment plan. The difference between the court case and a settlement that is provided between two companies is that court case discharges the debts after a certain amount of time. As everyone knows the procedure cannot eliminate someone’s student loan debts. An individual must either pay these off or learn to live with the consequences of default.
Someone who decides to settle his debts in this manner takes a step toward greater fiscal responsibility. It may result in a slightly lowered credit score for some time. The average person who finds himself in this situation does not have a high credit rating by the time he reaches this point. If he keeps up with the payment he may find that his credit rating increases. Laws passed during the Obama administration prevent the debt settlement companies from advertising their services and telling people that they will set up an account for their benefit. Now the payments someone makes to these companies must go to paying down a person’s debt. If someone uses a bankruptcy lawyer he may find that many of his older debts are discharged. After all a company can try to keep a debt alive but it must be removed from a person’s records after the statute of limitations runs out. Federal loans are the only exceptions to this particular rule.
Searching for a debt settlement company that meets an individual’s needs may not be a fun process. As any adult knows there are many things that are not fun that they must do. It may even be that they are trying to correct some of the consequences of their childish behavior when they reach this stage. For more guides and tips, please click here.