i. Debt Settlement
ii. Debt Consolidation
The first exemption I will discuss is settlement of liability. Liability settlement is regarded as the finest alternative to bankruptcy and any other method of eliminating liabilities. This procedure has simplified the lives of many individuals. This technique is regarded favorably by both creditors and debtors. By paying 30 to 40 percent of the original amount, debtors are relieved of their entire obligation, granted additional repayment time, and charged low interest rates on the remaining loan balance. In the event of insolvency, creditors recover a portion of the funds they were unable to retrieve.
Debt consolidation will be the subject of my next section on bankruptcy exemptions. This method is not as effective as liability settlement, but it is far superior to declaring bankruptcy. In this method, credit counseling services assist the debtor by contemplating all of his debts as a single sum. The debtor's interest rate on these quantities has been reduced by 25%, and he can now pay off his debt by making a single monthly payment. He ceases making monthly payments on multiple liabilities. This method is not commonly considered because it does not assist eliminate debt. It aids in loan repayment, but the debtor must still repay the entire loan amount.
These two methods are considered preferable to filing for insolvency because they do not have the same negative impact on a person's credit report. As the insolvency filer's credit report reveals that he or she is an insolvency filer, the filer's credit rating is negatively affected. Such an individual is deemed unethical by lenders and employers. They are hesitant to provide loans and employment to this individual. Even if they provide employment and a loan, they manipulate the situation by charging higher interest rates, offering low wages, shortening the repayment period, and extracting additional work from the bankruptcy filer.
" - https://www.affordablecebu.com/
