New Federal Debt Relief Laws - How New Laws Make Debt Settlement Better Than Filing Bankruptcy

Online, November 17, 2010 (Newswire.com) - New bankruptcy laws that were recently passed have made Ch. 7 bankruptcy much more difficult to qualify for and made debt settlement programs a more financially attractive decision. Consumers on the verge of bankruptcy should at least consider negotiating a settlement deal before filing bankruptcy. Thanks to new federal laws passed on October 27 2010, you won't have to pay a penny until your debt balances settle for at least 60% of the balance. This makes debt settlement programs much more legitimate.

The new bankruptcy laws were passed in 2005 but we are now just now starting to see the full effects. Consumers are having a much more difficult time filing and getting accepted for Ch. 7 bankruptcy. Ch. 7 bankruptcy is considered the "clean slate" type of bankruptcy where the majority of your debt is completely written off and forgiven. This used to be a financially attractive decision for many consumers and small business but it is much more difficult to qualify for now and the process is just a complete headache.

You are more likely to qualify for Ch.13. This is basically a reorganizing of your debts and you typically will still pay back most of your debt just over an extended period of time. This is similar to getting a settlement deal with one major difference. The effect on your credit score. Bankruptcy will hurt your credit score for at least 7 years while many people can recover from debt settlement in 3 years or so. If you have at least $10,000 in unsecured debt then it would be a much better decision, especially with these new federal laws in place, to consider negotiating a debt settlement rather than filing for bankruptcy.

Getting out of debt through a debt settlement process is currently very popular but you need to know where to locate the best performing programs in order to get the best deals. To compare debt settlement companies it would be wise to visit a Free Debt Relief Network which will locate the best performing companies in your area for free.

Check out the following link for free debt help from a certified debt relief specialist. They will provide you non-biased information on what debt relief option makes the most financial sense for you.

Free Debt Relief Help