subject: Bankruptcy or Debt Settlement? Which is better? [print this page] Author: Rodrigo Fields Author: Rodrigo Fields
Due to the exponential growth of consumer debts, most people who have debt often find themselves considering the four most popular ways to get out of debt: debt management, debt consolidation, debt settlement and bankruptcy. Among the four, the last two options are the most frequently used way out of debt problems. Their popularity is due to their advantages and disadvantages as well as the amount of debt involved. The amount of debt involved usually is the deciding point on whether one should go for debt settlement or bankruptcy. For those who have debts and are continuously failing to comply paying off their debts, debt settlement may be a gift from the Heavens. Debt settlement can help those poor souls to have a lighter repayment process. They do not have to pay all their multiple debts simultaneously. Instead, they can put all those debts into a single account and that single account is what they are going to pay. It clearly can be much better than paying different debts with the same due dates: less hassle and less stress. Add to that their creditors may no longer be paying frequent visits to them and the calls from collectors may surely be gone, though not immediately, still it will be a relief. Another factor for its popularity is that it does not have completely negative implications to ones credit score. Credit score measures the creditworthiness of a debtor. If one has a negative credit score, he or she will have a hard time taking out loans and if they are granted, the loan will carry high interest rates. If it is otherwise, then a debtor will be granted loans and will not worry about sky-high interest rates. Bankruptcy will also help those people who are incapable of paying further liabilities. Once it is filed, all the stressing calls and humiliating visits from the creditor can stop. It will bring great relief to those who are have been suffering long enough with their debts. However, it will be filed in their credit history and will last for more than 5 years, 7 years at the most. Moreover, taking out new loans after declaring bankruptcy will surely be difficult! Lenders will assess your credit profile and if your previous claim of inability to pay further liabilities is shown, then the request for loan will almost certainly be rejected. The implications are negative that is why others prefer to go for the debt settlement. Getting out of debt is a tricky business, so be sure that you know the nature of the alternative you can pursue so that you may save yourself from unnecessary regrets.About the Author:
