Law - Bankruptcy is a legal process, and the final decision on how to deal with debt is decided by the judge or the judiciary. This means that once the judge decides to go bankrupt, there will be no turning back. Solving the debt problem is not a court process. Therefore, lawyers are not required to complete this process.
Impact on your life - Bankruptcy can affect every part of your life, depending on the type of bankruptcy you apply for. All your property, all bills, all income, etc. are counted and considered as where the bankruptcy trustee is and how to use the money to pay off your debt. Debt settlement is handled differently, giving more control to consumers. However, debt liquidation cannot provide legal protection for lenders; it is not just a commercial transaction but a legal action.
Impact on credit scores - Bankruptcy can help clear debts, some of which will be cleared without paying them any fees. Therefore, bankruptcy adds an important black mark to your credit report and will be there for a decade. Solving your debt does not eliminate your debt; it reduces the amount you owe and allows you to pay lower fees. Debt settlement companies will reduce the amount owed on your behalf. This is very different from paying off debts. Therefore, your credit score will be hit, but now it is different from the bankruptcy case.
Impact on Your Debt - As mentioned earlier, applying for bankruptcy can completely eliminate some of your debt if you are good enough to express your difficulties. A debt clearing company, no matter how good it is, cannot let all your credit card debt or medical bills disappear. In addition, debt settlement has nothing to do with secured debt, such as mortgage loans, car loans, etc.
Cost - Bankruptcy lawyers may charge a fixed fee of thousands of dollars, depending on the complexity of the case, the type of bankruptcy you are applying for and so on. Debt settlement companies are likely to charge a percentage of your debt as fees, so their cost is likely to depend on the amount of unsecured debt you owe.
For those facing debt peaks, they can look at bankruptcy and debt settlement in military terms. Bankruptcy is almost like an atomic bomb, destroying everything in order to solve the debt problem. Debt settlement companies can usually provide you with better solutions.
[ad_2]
Orignal From: What is the difference between debt liquidation or bankruptcy filing?
No comments:
Post a Comment