subject: Debt Settlement Programs Vs Filing Bankruptcy - Which Makes More Economic Sense? [print this page] Many people end up overusing credit and get burdened with huge loans. On the other hand income is the same or even lesser than before due to the rampant salary cuts and unemployment. This is the reason that most people are unable to repay their debts and start to contemplate bankruptcy in desperation. However a bankruptcy remains on a person's credit record for 8 to 10 years and on the public record forever. The credit scores of a person filing bankruptcy take a huge hit and it becomes impossible for him or her to get credit anywhere in the market. At the same time getting insurance and even necessary utility services becomes difficult and more expensive. A bankruptcy also affects an individual's chances of getting good employment anywhere in the market. Not only this, a bankruptcy also affects a person adversely in his or her social life. This is the reason a bankruptcy should be avoided at all costs.
In fact there is an alternative to bankruptcy in the form of debt settlement programs. A debtor can undertake such a program himself or herself or hire the professional services of a debt settlement company. On hiring a debt settlement company, a debtor does not have to deal with the creditors at all. Even the collection calls are handled by the debt settlement company. A debt settlement company negotiates the debts with the various creditors on behalf of the debtor. Good negotiation can reduce the debts by an average of 50% of the original amount payable. Even this amount can be paid off either as a lump sum or in equated monthly installments. The debt settlement company even negotiates the interest rate to be paid on this settlement amount payable.
A debt settlement does have a negative impact on an individual's credit score but can be rebuilt within 2-3 years with the help of a credit repair program. There are many credit repair companies which not only undertake the credit repair program on behalf of the individual, they also help in creating a budget plan which will help the individual to stay out of debt in the future.
Debt Settlement Programs Vs Filing Bankruptcy - Which Makes More Economic Sense?
