When individuals are faced with the multitude of options for dealing with debt, they may feel overwhelmed. South Carolina residents may wish to consider debt management practices in hopes of avoiding having to file for bankruptcy. However, there are many cases in which debt management plans may not always be the best route, and bankruptcy could help parties reach a fresh start more quickly and efficiently.
With management plans, individuals with debt continue to make payments, but their payments are made through a counseling agency. The agency often works with creditors to lower interest rates and fees associated with the individuals’ debt balances. Though this method may have less of an impact on credit scores, it can also take a considerable amount of time and may continue to strain individuals’ finances.
If individuals are facing overwhelming debt due to mortgage issues, car loans and/or medical bills, a debt management plan through a counseling agency may not be effective. Additionally, if individuals miss a payment on their plans, the plans could be canceled. Therefore, parties may wish to give bankruptcy more consideration if they are hoping to effectively handle various types of debt in a more timely and potentially cheaper manner.
Of course, each individual will likely want to explore the options that are most suited to his or her circumstances. If South Carolina residents find that bankruptcy could be more fitting to their needs, they may wish to find out more information. Consulting with experienced attorneys may allow them to better understand the potential benefits of bankruptcy.
Source: Chicago Tribune, “Do debt management plans work?”, Aug. 1, 2016