subject: Disadvantages of Bankruptcy over Debt Settlement [print this page] Many individuals have turned to bankruptcy as their solution to their growing debt since they like the fact that whole process can be able to resolve many of their outstanding accounts. What most bankruptcy advocates fail to inform them is the fact that this is not a free pass that magically erase all financial problems. If you are going to resort to this move, you may have a hard time dealing with the outcome later on especially when you will come to a point where you will need to take a loan for an important personal or business project.
This credit repair solution has been romanticized by a lot of personalities, but not everyone can be able to easily bounce back from the repercussions. Instead of taking this route instantly, you may like to study the possibility of trying debt settlement first especially since the benefits are far more advantageous as far as bankruptcy goes. It may not be an instant solution, but it is certainly less messy and less critical to your finances in the future.
As most financial experts can tell you, bankruptcy should only be the last resort you should take because the consequences are heavier than what you may first perceived. This move is more damaging to your credit score and history compared to debt settlement since you don't have the option of asking your creditors to wipe off any bad credit records you have in your credit history. If you are going to try and borrow some money in the near future, they would see that you have filed for this extreme solution before. As a result, they may not be as welcoming because you will have a bad stigma when it comes to credit management.
A lot of people would instantly assume that they should declare bankruptcy once they feel that they can no longer deal with their current credit standing. Though you may heavily be in debt, it doesn't mean you are already eligible to use this option. You will only get frustrated if you are not because it would mean that you would have to sacrifice some of your time and money. Debt management is easier to deal with since aside from doing it yourself, you can hire a qualified settlement company to do it as soon as possible.
