subject: Credit Debt Bankruptcy Vs Debt Settlement Programs - Pros And Cons [print this page] Credit Debt Bankruptcy Vs Debt Settlement Programs - Pros And Cons
Not sure which option to choose from Bankruptcy or Debt Settlement program? Read this article till the end and you will be able to choose your course without any doubt in your mind.It is a usual trend that every thing, every procedure has its pros and cons. The case with bankruptcy is no different. Let us try to compare the pros and cons of bankruptcy with its alternative, Debt Settlement. To make it simple and easy to comprehend I will compare one advantage /disadvantage of both programs at the same time.
What is the most important thing in business? Of course it is money. You are doing all this, to save money, to lead a comfortable life. Filing bankruptcy requires huge fees of the insolvency companies or bankruptcy attorneys while in Debt Settlement you have to pay the settlement company a small percentage of the reduction in the total debt.
It is truly said that time is money. So, for any organization or individual, time is as important as money. Clearing your debts by filing bankruptcy can take up to decades due to immense paperwork, long court hearings and legal tests while debt settlement takes minimum time to complete. The settlement company figures out the financial situation and repayment plan and then negotiates with the creditor to reach a mutual agreement. If the company is skillful and professional, settlement process can be completed in no time!
Credit rating is the major measure to be considered by any creditor before lending money to any debtor. Bad credit rating means lesser chances of getting loan in the future. Bankruptcy has worst effects on your credit rating and you may not be eligible for any future loan for more than seven years. Debt settlement also has odd effects on your rating, but only for the time taken by the process to complete. Your credit rating gets better when the creditor clears you of your debt.
Government's backing up is an important factor for the success for any program in the business and bankruptcy is deprived of it because of its negative effects on the economy while debt settlement has been encouraged by the new laws and regulations, making it the best possible option now!
Debt settlement is a legitimate alternative to filing bankruptcy. Consumers can expect to eliminate around 50% of their unsecured debt with the help of a legitimate settlement program. With the new FTC laws recently passed in July 2010, debt settlement is a much less risky option. If they don't settle your balance you don't have to pay a dime.
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