Why is bankruptcy better than debt management companies?

Although various debt management agencies say they provide an alternative to bankruptcy, many charge high fees for their services which consume much of the savings they profess to obtain from lenders.

Additionally, a bankruptcy can often solve financial problems for much less cost than what these companies charge to reduce the problem.

Likewise, most people who have attempted to "negotiate" a reduction in balances owed to their creditors usually find that the creditors are unwilling to do so and eventually demand the full amount due, plus interest.

Moreover, reducing the amount owed through debt management can result in additional federal tax liability that doesn't occur if the debt is discharged in bankruptcy.

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