Lately, you can’t turn on the TV without seeing a commercial for a bankruptcy law firm or some kind of debt settlement company. What’s funny is, half of these commercials are during the news where they’re reporting that unemployment rates have declined to 6.7% and the economy has fully recovered. The Dow last year set record highs and the NASDAQ has almost climbed to the height of the Internet bubble. There are no fundamentals that are driving this market. Many experts that have studied the market and are honest believe that quantitative easing has been the driving force behind the record numbers in the stock market, not an economic recovery. One day there is a global currency crisis that causes the mass selloff only to bounce back from better-than-expected earnings news from a single company. I don’t know about you but to me it makes no sense.
It’s no secret that the most popular form of debt elimination is filing bankruptcy. Over the last few years since the economy went into recession, many alternatives to filing for bankruptcy have popped up. People need to be very careful as things that sound too good to be true are probably too good to be true. Every time the economy has gone into the tank, creative solutions enter the marketplace, some of which are scams. Look back over the last 50 years and you will see different scams that have popped up during times of economic decline. We have seen everything from pyramids to multilevel marketing companies promising financial security and wealth. Just like I said earlier if it sounds too good to be true, it is. The old adage of the only way to make it is through hard work is done in our culture today. People want it now and they don’t care what it cost to get it and we’re not talking about price. Just like the housing crisis prior to the bubble bursting in 2007, people were buying houses they couldn’t afford just because they believed that they deserved it.
Before looking at the alternatives a person should definitely consult a bankruptcy attorney to see if they even qualify to file Chapter 7 bankruptcy. This will at least give them advanced notice if the alternatives did not work out they still have an ace in the hole. A bankruptcy attorney will be honest with the individual considering filing. Filing bankruptcy is not for everyone and attorneys know that. But the attorney also knows the downside to debt settlement and debt consolidation. They should be able to shed light on the individual’s personal financial situation and let them know if one of these other options is even feasible.
One alternative to filing bankruptcy is debt settlement. Recently, there’ve been many debt settlement companies that have sprung up in the down economy. What happens in a debt settlement is the company collects the money that would be paid as payments to creditors for a period of time to build up enough money to attempt to settle the debts. Most debt settlement companies will offer the creditors 50% of what is owed. For someone that has $10,000 or less in credit card debt, this might be a viable option. For someone that has much more, it is really not feasible and filing bankruptcy is much more cost effective. This option has become very popular over the last few years, but individuals that are interested should be wary as there are many fly-by-night operations out there. People should first look for references before attempting any kind of debt settlement. One thing to remember, most debt settlement companies will not share the information that any individual can negotiate with their own creditors if they feel up to it. The same negotiations will apply to an individual trying to settle their debt just as much as the company would do. Before doing anything one should check all their options.
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