Why Debt Settlement Has Become a Viable Alternative to Bankruptcy

The great economic recession that affected most people is a matter of the past

, but the damage it has done still remains. May people are still suffering from bad debts and are looking for ways to come out of debt miseries. Before the markets started to recover people found a solution in declaring bankruptcy. On interviewing a section of the people who filed bankruptcy a survey revealed that their problems have multiplied and they are in deeper debt. We will explore why debt settlement is a better option than declaring bankruptcy in the coming sections.

A bankruptcy declaration not only affects your credibility and goodwill but it does serious damage to your credit score. As soon as a bankruptcy is declared your creditors have due obligation to report it to the credit reporting agencies. This will immediately bring down your credit score. Worse, a bankruptcy declaration is recorded on your credit report for about 10 years. If your credit reports don't portray you in good light lenders will definitely be discouraged to offer discounts on the borrowings and may sometimes turn down credit. This not only applies to loans, as nowadays landlords, employers, insurance companies and other service providers refer to your credit score before taking a decision. Why do want to put your financial future in jeopardy?

Debt settlement is the best option when it comes to bad debt resolution. This is because you maintain goodwill by deciding to payoff the remaining bad debts after agreeing on a discount. This not only settles bad debts once for all, but it also leaves your credit score untouched. When you decide to go in for a debt settlement deal, the creditor will be more than happy to give you a discount and settle remaining debts because a bankruptcy declaration will nullify his chances of debt recovery. However, as the debt settlement involves lot of communication and negotiation efforts it is best done by adept debt settlement firms that are knowledgeable about the process. You can strike a debt settlement deal with your creditor, but to get the best discount you should decide to work with a responsible debt settlement firm. Understand the basics of debt settlement and how these companies work. It will help you make clinical decisions with great precision. Start your journey to a debt free financial portfolio.

Why Debt Settlement Has Become a Viable Alternative to Bankruptcy

By: Crosby Bartholomew

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