Preserving your credit score while repaying debts

People in debt may be tempted to declare bankruptcy as a way out of their mounting obligations. As an option, however, declaring bankruptcy is far from the ideal recourse and should not be considered lightly. It is only often in truly dire circumstances when the consequences of filing for either Chapter 7 or Chapter 13 would be preferable to continued debt. 

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Frequently, however, the side effects of bankruptcy are themselves damaging to one’s credit score, making future financial assistance impossible to acquire. Bankruptcy also leads to the liquidation of most assets, including those dear to the owner. 

Rather than avail of the last resort, debtors can instead pursue other debt resolution strategies, which would allow them to pay off their creditors in a timely manner without damaging their credit scores in the long term. 

Most forms of debt relief involve consolidating multiple payments to other parties into one that can be paid off at a more flexible or reasonable time. This can range from taking out a loan to be used to pay off other creditors, to working out a more reasonable lump sum or terms of payment to a creditor.  

Often, creditors are more than willing to make flexible concessions to ensure cash flow. If the reworked payments are received on time, one’s credit rating is not negatively affected. 

Those with debts that may be too difficult to track, but are not unpayable, may opt to have their debts managed by professionals. 

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Consolifi provides debt settlement services to help people get back on track with their finances. Visit this website for more on the advantages of debt settlement.