Debt can wreak havoc on your personal life, cause serious stress and even strain your relationships with friends and family members.
So what are some of the most effective debt stoppers? One of the most potent ways to eliminate debt is to file for personal bankruptcy.
Talk to a lawyer about whether bankruptcy might be able to help you conquer your debt:
Bankruptcy vs. Other Debt Stoppers
Of course, there are many ways to get out of debt. Here's a comparison of some of the most common debt stoppers used by American consumers.
- Personal bankruptcy: Bankruptcy has many advantages as a debt stopper. First of all, it's regulated at the federal level by complex laws, which means that, no matter where in the country you live, you know that you'll basically get the same sort of protection from debts. Second, bankruptcy offers the filer legal protection from creditors – in other words, if you choose to file for bankruptcy, your creditors will be legally prohibited from contacting you and attempting to collect on your debts. Personal bankruptcy comes in two popular forms: Chapter 7 and Chapter 13. Each offers unique benefits.
- Debt settlement: Another well-known debt stopper, debt settlement has the potential to be very effective but is often cited as risky for a number of reasons. First, it's difficult for consumers to determine whether a debt settlement company is legitimate. The best debt settlers help consumers negotiate with their creditors to lower the total amount of debts that they owe. The worst debt settlers, though, charge consumers astronomical fees and do little or no negotiation with creditors, often leaving consumers in more debt than they were when they began. Be sure you thoroughly research any company you decide to pursue debt settlement with.
- Credit counseling: This debt stopper involves meeting with a certified counseling firm to map out a plan for repaying debts and establishing healthier financial habits across the board. Credit counseling can work well, but, like debt settlement, it is not regulated at the national level and, in some cases, can be a scam.
- Creditor negotiation: One final method for overcoming debt is to cut out the middleman and call your creditors yourself to ask for lowered interest rates or a decrease in the total principal you owe. While this method can work well, it requires a lot of work on the part of the consumer: reviewing accounts, negotiating with creditors, getting all negotiated payment terms in writing, etc.
What Debt Stopper Will Work Best for Me?
Every person's financial situation is different, so there's no easy way to determine which technique for stopping debt will best serve you and your finances.
But if you take advantage of this opportunity to consult with a bankruptcy lawyer free of charge, you may find yourself one step closer to understanding what various debt stoppers might reasonably be able to do for you.