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Should I Claim Bankruptcy or Seek Debt Relief?

Weighing the Options: Bankruptcy or Debt Relief

If you’re struggling with huge amounts of debt and don’t know which way to turn, debt relief can be an amazing tool to help you regain control of your life. Especially when medical bills are piling up and you have thousands of dollars of credit card debt, it can feel like you are suffocating t. Because of this, it can be difficult to determine which debt solution is best for you, particularly if you are considering filing for bankruptcy.

You may be wondering: should I claim bankruptcy or pursue an alternative debt relief option? At Liberty Debt Relief, we know what it’s like to struggle with debt and we pride ourselves on our industry expertise and knowledge. We have analyzed bankruptcy compared to other debt relief options in order to give you a comprehensive overview.

Bankruptcy vs. General Debt Relief

Bankruptcy

Bankruptcy is a legal option that will completely remove all or most of your debt and give you a fresh start financially, but does it comes at a huge cost. This will severely impact your credit score and can stay on your report for several years, which will make it incredibly difficult to open a credit card, get a lease for an apartment, or do anything that involves a credit check. That also includes getting a car, buying a home, or getting a loan.

When deciding between bankruptcy or debt relief, remember that the former might mean you lose any assets you own, this includes your home or any property that you may have. It is also important to mention that all the personal financial information you file with the court, in regards to your bankruptcy, will become become available to the public.

But bankruptcy does provide relief if you do not have any other option. Once you file for bankruptcy your debt collectors and creditors will no longer be able to take action against you for not paying your debt. Dealing with the collection calls and overwhelming debt payments is a big concern for you then this may be a huge relief. It is a huge decision to file for bankruptcy, so it is extremely important to meet with a debt specialist or attorney in order to explore all of your various options before deciding to file.

Debt Relief

There are a variety of debt relief options available today that could be used as an alternative to bankruptcy. At Liberty Debt Relief, we have certified debt specialists who are trained in developing comprehensive plans to help you analyze how you can realistically pay off your debt over time.

When looking into bankruptcy or debt relief, debt settlement is really one of the better options. This is a process that would allow you to pay back a portion of your outstanding debt, while the remainder of the debt is forgiven. This approach does not work for all types of debt and may not be successful for everyone, but working with our experienced specialists can increase your chances.

Debt consolidation is also an option you could explore. It involves combining all of your unsecured debt into one single account so you only have to make one debt payment a month. Meeting with a Liberty Debt Relief expert will help you to explore all of the various debt relief options available to you. You will also be able to come up with a strategic plan to tackle your debt and gain control of your finances.

Impact on your Financial Health

Both bankruptcy and debt relief can have an impact on your overall financial health. It is very important to do your research and meet with the right professionals in order to determine if bankruptcy or debt relief is best for you. With Liberty Debt Relief, you can schedule a free consultation with one of our experts today to review your individual debt circumstances. We work with lenders everyday to negotiate for our clients and have extensive knowledge of the industry. This means we are able give you a comprehensive debt relief solution that have been tested and are successful.

Long Term Financial Success

Our goal is for you gain control of your finances and be set-up to achieve more financial freedom. Filing for bankruptcy or trying to figure out what debt relief option is best can be overwhelming and very stressful, but, with Liberty Debt Relief, you don’t have to face your debt alone. Contact us today to see which of our services is best for you.

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How Do I Negotiate Debt Settlement?

Having enormous debt can be financially and mentally draining. It can be challenging to deal with a financial setback, but if you are proactive in addressing your debt issues head-on and creating a comprehensive plan, you are already taking the necessary steps to eventually become debt free. If you’re wondering about how to negotiate debt settlement, there are multiple options available that can be tailored to your specific debt situation.

Negotiating Debt Settlements

Debt settlement occurs when you, your lender, and perhaps a third-party company like Liberty Debt Relief that specializes in this type of negotiating, determine an amount that is needed to settle your outstanding balance. This is typically a partial amount, but lenders who are willing to make such an agreement usually do so because they would prefer to at least receive part of the money you owe instead of getting nothing. For example, if you do eventually decide to file for bankruptcy, it is likely that they will not receive any money or will get very little in the end. Lenders know this, so they are sometimes willing to work with you to come to an agreement.

Debt settlement can be a great debt relief tool depending on the amount of debt that you have and your financial situation. Here are some of the types of debt settlements you can negotiate:

Lump Sum Payment

A lump sum payment is when a lender, such as a credit card company, is willing to accept a lump sum payment of cash that is lower than what you owe to settle your debt balance. For example, if you owe $10,000 and you can negotiate to 40%, then you end up only paying $4,000. Agreeing to a lump sum payment also means that you must have a significant amount of cash on hand to make the payment. That may not be possible depending on your financial situation.

Forbearance Agreement

A forbearance agreement is another option to consider when negotiating debt settlement. This can be a great option if you are currently experiencing a financial setback and need time to regain control of your finances. With a forbearance agreement, your lender freezes your account balance and agrees to a set an interest rate maximum. For a specific amount of time, you are not charged any late fees or penalties. This can give you the time you need to save money and pay off your debt.

Income-Based Repayment Plan

An income-based repayment plan is also a great option to consider. With an income-based repayment plan, you can work with your lender to come up with a comprehensive schedule for you to repay your debt, potentially at a lower interest rate. During this time, your account balance is frozen, so you do not have to accrue additional interest or late fees. Again, this will depend on your lender and if they are willing to negotiate with you.

Finding the Right Resources

Because of the considerable impact debt settlement can have on your finances, taxes, and credit, it is vital to do your research and find the resources you need to make the best decisions for your future. Liberty Debt Relief would like to give you all the information you need and negotiate debt settlement on your behalf, so apply to work with us today.

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Debt Consolidation vs. Debt Settlement Agreement

Debt Consolidation vs. a Debt Settlement Agreement: Which is Best for You?

With all of the information out there today, it can be difficult to decide which debt relief option is best for you. Whether you have multiple maxed out credit cards, huge car payments, or large amounts of unexpected medical debt, there are options available to help you gain control of your finances. Knowing all of your options and what will be best for your situation is key to coming up with a realistic and actionable plan to becoming debt free.

There are many different aspects you need to know when considering debt consolidation or a debt settlement agreement. Both are tools that can be used to experience debt relief and ultimately regain control of your finances.

What is a Debt Settlement Agreement?

This solution is an agreement that is made between you and your lender that allows you to pay back a partial amount of your full outstanding debt and settle your account. Depending on the amount of debt that you have, the process can take a few month or even years. Additionally, not all lenders are as willing to negotiate an agreement, so this option is not always available.

Debt settlement agreements can also have a potentially negative impact on your credit score. If you are not making consistent payments during negotiations with your lender, or if you are not working with a debt relief organization to save money and offer your lender a large payment all at once, then your credit score will definitely be impacted. These are all factors that need to be considered when deciding if this is the right option for you.

What is Debt Consolidation?

Debt consolidation is the merging of all of your outstanding unsecured debt, into one single payment. Unsecured debt is money owed with nothing being held as collateral. With this approach, you are also able to get a lower interest rate, which means you will pay less in interest over the lifetime of the loan.

With this option, your debt should become easier for you to manage, though it is not immediately paid off. If, however, you can consistently make all of your payments, this option can also help to improve your credit score.

Differences between a Debt Settlement Agreement and a Debt Consolidation Loan

The main difference between these two debt relief options is that the former allows you to negotiate and only be responsible for paying a portion of what you owe instead of paying the full amount. With the latter, the amount of debt that you owe is not reduced through negotiations but instead is simply transferred into one place so that it is easier to manage.

A debt settlement agreement can also impact your credit score for 5 to 7 years depending on the total amount due, while debt consolidation should not impact your credit score unless you fall behind and begin to miss payments. If you can consistently make your payment every month, this will actually help to improve your credit score over time.

It is necessary to do your research when developing a comprehensive debt relief strategy. This will help you in coming up with a plan and a budget that actually meets your needs and does not cost you more in the long run. It is also important to only work with trusted professionals and organizations so that you can actually come up with a plan that is benefit for you. Contact us at Liberty Debt Relief to see how we can advice you towards more financial freedom.

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How Debt Settlement Works

It can be overwhelming and stressful to manage enormous debt. However, there is a way to experience relief through debt settlement. This can be a great option for those with credit card debt, car loans, or outstanding medical bills. It is essential to thoroughly research all of the debt relief options available to you to make the best decision for your financial future and freedom.

What is Debt Settlement?

Debt settlement is an arrangement between you and your lender in which you agree to pay back a partial amount to settle your full outstanding debt balance. This process can take months or years depending on your lender and the specific balance that you owe. It is important to note that not all lenders are willing to negotiate these agreements, so this form of debt relief is not always an available option.

Another critical factor to consider is the potential impact that it can have on your credit score for roughly the next 5 to 7 years. Your credit score is a key metric used to determine your creditworthiness and overall ability to obtain credit. Debt settlement can have a significant impact on your credit score depending on the overall amount that you owe. That is why it is so invaluable to do your research and also only work with trusted professionals and organizations.

The Process

First, you must decide if you will work with a debt settlement company, a lawyer, or manage the negotiation process on your own. It can be incredibly difficult to handle negotiations without the right level of experience. There are, however, experts who specialize in working with lenders to negotiate the best possible outcome for you, but it does come with a cost. Specialists will often charge a fee, typically a percentage of the amount owed, which will be determined once your debt is settled, but having the proper background and experience is key to a successful negotiation.

If you are working with a debt settlement company, you will use the time during the negotiation to save the money you will offer your lender. This means that, if you are currently making payments towards your debt, you stop making those to your lender and instead send that amount to the company to accrue what you have saved.

Once you and your lender come to a written agreement, then you will finally be able to settle your debt and experience debt relief. It is important to note that the government and IRS will consider the debt that is forgiven as income. This means that you will also be required to pay any relevant taxes on this amount.

The Path to Financial Freedom

It can be incredibly frustrating to deal with a substantial financial setback while at the same time trying to regain control of your finances and debt. However, whatever your debt situation, know that there are options available. Debt settlement can be an excellent option for you to potentially lower the amount of money that you owe and ultimately help you to get back on the path to financial freedom. See how we at Liberty Debt Relief can help.

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