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Debt Relief: What Are the Alternatives to Bankruptcy?

07th December 2010
By Brown.Walker in Law
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For the millions of Americans struggling with debt, there are a lot of voices that claim to help. Unfortunately, the variety and differences in the options can be downright disorienting. Here is a quick run-down on the options that you have to achieve debt relief.

Debt Consolidation

Debt consolidation simply means taking out a single loan to pay off a number of other loans. This method can simplify the process by requiring the debtor to only pay a single bill as opposed to keeping up with several. This single loan can offer a better interest rate than the ones before, which can help to pay off the loan faster. One of the risks of debt consolidation is that in order to obtain the loan, individuals must put up collateral in case they default on this single loan. More often than not, the collateral is their home. Additionally, most debt consolidation programs extend terms, which means though the monthly payment is lower, you are in debt longer, thus paying the lender more.

Credit Counseling

Credit counseling involves sitting down with a councilor to discuss how to avoid incurring debts that canít be repaid. Additionally, it often involves establishing a debt management plan that helps a debtor repay debt. During the process, an individual can learn lots of great information yet in the end, some people who get counseling actually end up paying more than their original debt, according to one study. Credit counseling is also rife with scam artists who can disappear with your money overnight.

Debt Settlement

Millions of Americans have gone through a debt settlement program to handle their credit card debt. For a hefty fee, a debt settlement company will claim to settle your debt with a credit card company for less than the amount you owe. The problem is that debt settlement is an extremely difficult solution to pursue and many settlement companies donít perform the services that they the process is confusing, costly, and could very well ruin your credit in the process.


Individuals can file for bankruptcy with a qualified lawyer who represents the debtor in court. The two main types of bankruptcy for individuals are Chapter 7 and Chapter 13. Once bankruptcy is filed, plans are drawn up to repay debts. In most cases, bankruptcy completely eliminates debt. In 2009, bankruptcy filings in Louisiana increased 17.7 percent and 34 percent nationwide.

Some people may be too deep in debt for any of the above solutions to realistically work for them. Thatís when bankruptcy is a good option. When bad things happen to good people, the Long Island bankruptcy attorneys at Doyaga and Schaefer are here to help. Stop the harassment, the worry, the financial stress. For a free same-day consultation, call 718-488-7500 or 516-656-7500, or visit our website at for more information.

Brian Reed. Long Island bankruptcy To consult with New York bankruptcy lawyers who specialize solely on bankruptcy, contact the attorneys at Doyaga and Schaefer at 718-488-7500 or 516-656-7500 for a free consultation.
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