What options are available for someone who has more unsecured debt than they can manage or repay?

Option #1 - Bankruptcy Chapter 7 or 13
- Negative credit report for ten years
- BK-13 may require the pay back of principle amounts borrowed over a five year period
- Attorney fees to file BK typically range between $2,000 and $5,000
- Amounts paid into a BK repayment plan cannot be accessed in the case of an emergency
- Typical payment on $40,000 of an unsecured debt would be in the $800 range for five years
- Provides some protection for other assets if BK judge allows those assets to remain in the consumer's possession

Option #2 - Debt Management, Consumer Credit Counseling or some other Non-Profit Debt repayment program
- Negative credit report for 7 years
- Usually requires 100% pay back of principle amounts and usually some interest
- Fees for the program are generally split between the lender and the consumer
- Amounts paid into a non-profit repayment plan cannot be accessed in the case of an emergency
- Typical payment on $40,000 of an unsecured debt would be in the $1000 range up to five years
- Creditors may seek any and all forms of collection for missed payments including collection agencies, judgments or garnishments

Option #3 - Do Nothing
- Negative credit forever, as accounts are resold to collection agencies perpetually
- Interest and penalties continue to accrue causing the balances to continually increase
- The cost of never ever being able to re-enter the credit system could far exceed the money saved by not paying over time
- Creditors may seek any and all forms of collection for missed payments including collection agencies, judgments or garnishments

Option #4 - Debt Settlement through Credit Relief Assistance
- Negative credit report for 7 years or less once settled sooner
- Attorney contract guarantees amounts will be settled for less than 50% of the amounts owed on average
- Payment plans only last 18-48 months by which time the consumer is debt free and protected from any further collection efforts by the creditor
- Typical payment on $40,000 of unsecured debt would be in the $569 - $750 range for 3 - 4 years
- All fees are included and paid from the monthly payments requiring no additional out of pocket expenses from the consumer
- Some Debt Settlement programs allow the consumer to access their account in the case of an emergency and borrow or withdraw cash without penalty