Why Debt Settlement is Better Than Filing For Personal Bankruptcy

Why Debt Settlement is Better Than Filing For Personal Bankruptcy

Debt settlement is considered to be better than the method of bankruptcy filing because of various reasons. The method of settlement does not only help the consumers but also helps the creditors and maintains an overall economic balance. The method of bankruptcy on the contrary does exactly the opposite and has therefore moved to the back foot. Let us see what exactly happens in both methods.

Bankruptcy: Beginning with bankruptcy, it can be said that bankruptcy is good because it eliminates the debt of the consumers completely. But this is not the only thing that can save this method. Bankruptcy has a number of negative impacts.

Bankruptcy takes a very long time to complete and as a matter of fact, it is now difficult to file for bankruptcy and people willing to do so will have to face a credit counseling session where, if the counselors think that the person can repay the debts through modification in the budget, the person has to repay the debt in full.

After bankruptcy filing the consumers lose their credibility because their credit score goes down and the consumers are unable to get any further credit for the next 7-10 years that follow.

The creditors lose their liquidity once the consumers successfully file for bankruptcy. They fail to cover their costs and therefore, they approach a position where they reach the threshold of bankruptcy filing.

As the creditors lose their financial balance, the economy as a whole loses balance and movers towards recession instead of coming out of that.

Debt settlement: Settlement on the contrary negates all these bad effects of bankruptcy.

Settlement takes a smaller period of time and the consumers don't have to go through severe credit counseling sessions.

The creditors regain their credibility once the process of settlement is over and they can immediately borrow further credit after the process is complete.

The creditors get back a part of their liquidity and they manage to cover a part of their costs. The remaining cost is covered by the stimulus cash.

As the creditors regain financial stability, the economy as a whole becomes stable and slowly moves out of recession.

This is why debt settlement is better than filing for personal bankruptcy.

There are many debt settlement companies out there and not all of them are legitimate. That's why it's so important for consumers to use debt relief networks. These networks offer free help to determine what the most appropriate debt relief option is for you. They will give you an unbiased opinion and point you in the right direction whether it is debt settlement or another option.

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