Debt Relief Options - Debt Settlement Vs Filing Bankruptcy
If you are in deep debt you are probably considering these two options
, bankruptcy and debt settlement, but which one is better? This problem with debt has become very popular since the recession and the bad state of the economy and although consumers at first used to file for bankruptcy without even considering other options, now they are more informed about debt relief options.
We start with financial settlement and see what are the advantages and disadvantages about this option which was available for almost a decade. The only problem is that this option can only be used by consumers that suffered from the recession and are now in debt of over $10k, but this is not really a problem as much as it is good news for all the people that can't afford to pay back their loan after being fired from work. When you use a settlement, you basically negotiate with the creditors so that you can pay back as much as you can afford and not be forced to file for bankruptcy. Professional settlement companies are available for negotiations so that consumers can get the best deal possible but they also have the option to try alone but it is not recommended. Once you hire a settlement company, they will take care of the negotiations and you can get a reduction of 50% to 70% depending on the experience of the company and on your situation. Fees are quite affordable and not only can they be paid in installments but they only need to be paid after the negotiations are done.
Bankruptcy on the other hand is totally different and it costs quite a lot. You will need to hire a lawyer to represent you and you will also have to deal with a lot of paperwork. After a year, if everything goes right, you will be declared bankrupt and your debt will be cleared but your credit score will suffer and you will ruin your long term credit.
At the end of the day, it is up to choose what option you see fit but consider debt settlement before making a haste decision.
Debt settlement is a viable alternative to filing bankruptcy. Most consumers are able to eliminate at least 60% of their unsecured debt while avoiding many of the negative consequences with filing bankruptcy. If you are over $10k in unsecured debt you will be eligible for debt settlement.
Debt Relief Options - Debt Settlement Vs Filing Bankruptcy