People are now searching for bankruptcy alternatives to solve their arrears issues. This I because changes in the rules of insolvency is making filing difficult and all the advantages of saving a lot money has been replaced by the rule that the debtor has to hire a lawyer and enroll himself in a counseling course. The rule that anybody earning above the minimum wage limit of a certain state cannot file for chapter 7 is even making people look for bankruptcy alternatives. On the other hand people do not prefer filing under chapter 13 as according to this chapter only the repayment schedule is edited and the debtor has to pay the entire liability.
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The reasons above stated stimulate people to go for liability settlement which is one of the best bankruptcy alternatives. This is a true fact that getting approval for liability settlement is easier than insolvency. The main reason behind this is that the government is providing full support and is discouraging both the creditors and the debtors to take up this method to solve financial issues. The government is providing with stimulus money to the creditors which motivate them to allow the lenders to settle the liability amount. These way debtors do not make any loss and they themselves encourage the debtors to settle.
The cost involved in debt negotiation is lower than the cost involved in insolvency. Debtors can negotiate on their own with their lenders and they do not need any counseling services./ Even if the debtor makes up his mind for hiring a settlement firm; then even the cost does not increases to a great extend. This is because the debtors do not have to pay without the entire process. The debtors' only pay if the process is completed and the service providers has provided all the promised benefits.
The creditors are making no losses and are not defaulting and that is why it is easier for the debtors to use this option and get qualified for this option. The creditors are subsidized with the amount of money they have written off when a borrower settles the liability amount from the government. This way they do not end up making losses. They recover some part of the money from the debtors which they would not have if their borrower would have filed under chapter 7. All the reasons stated above make debt negotiation a better option than insolvency.
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