To understand your legal options, you have to know the various alternatives you have to settle your unsecured debt - better known as credit card debt, but includes any debts that are not secured by real property. In each case you should have a trained professional help you through if you want to be protected legally. There are always Do It Yourself methods, but you will spend a lot of time and not achieve the optimum goal.
There are several accepted methods
Debt Consolidation, if you can find a lender, you can get a consolidation loan, which will cover all of your outstanding debts, the lender will pay off your debts and give you one blanket loan at a lower rate of interest over a longer term with lower monthly payments. In today's environment these are very hard to come by. Credit Counseling, these are nonprofit agencies, approved by the government to help you learn to better handle your debt and payments and they will help you to understand credit by attending classes and counseling. They will also negotiate with your credits a total payment plan that they will oversee. You pay into the credit counseling agency and they disburse the payments to your creditors. This is a slow process but works well. Bankruptcy, this is the place of last resorts. When you just cannot pay your debts. It is the only method that requires court approval. It is a slow process and you give up all of your assets and all of your debts are forgiven and you are allowed to start over. Except your credit rating is damaged for at least 10 years. Debt Settlement, this is a process where a trained professional negotiates a settlement with your creditors based on a plan you have worked out together. In most cases the negotiator can reduce your debt by 50-60% and get you a payment plan and save your credit rating. This is by far your best route. Once the negotiations have been concluded the Debt Settlement professional will obtain legally binding letters of agreement from your creditors. You still will have the option if things do not improve to file for bankruptcy at a later time. Each of these methods is effective and each are can be legally binding. The only method that required court involvement is Bankruptcy and that requires a judge to discharge the bankruptcy.With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle. Check out the following link to locate legitimate debt relief companies in your state for free help.
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