Debt Settlement Vs. Bankruptcy

Posted by Sean Horan
2
Dec 18, 2009
591 Views
When you're faced with a mountain of debt than seems practically insurmountable, you are faced with a stark choice--debt settlement or bankruptcy.

Bankruptcy may appear to be the better option because when you file for bankruptcy you are instantly debt-free. The only drawback is that your credit will be ruined and it can take years to build it back up. You won’t be able to buy any big-ticket purchases, such as a house or a car, and apply for credit cards or bank loans. Bankruptcy should only be used as a last resort, meaning you have exhausted all other possibilities to resolve your debt and have no other options.

Before you even begin to think about bankruptcy, consider debt settlement. Debt settlement is the process of negotiating for a lower amount of debt, affordable monthly payments, and a lower interest rate; allowing you to pay off your debt.  Most creditors are willing to settle the debt because they know that they will get their money back. The benefits of debt settlement include: a lower balance or forgiveness of debt, a reduced interest rate, and a reduced monthly payment. Even though debt settlement will negatively impact your credit score, you won't have to spend years building it back up like you would after filing for bankruptcy.

The key to any debt settlement is the negotiation process. Sometimes, it is best to hire a third party negotiator, or a debt settlement company to hand the negotiating, because they are familiar with all of the credit laws, regulations and procedures involved. A reputable debt settlement company will be able to negotiate the best settlement possible on your behalf. Before you commit to any debt settlement company, do a little background research to make sure that they have your best interest at hand. The goal is to ease your financial stress, not to add to it. All in all, debt settlement is a much better option than bankruptcy when you consider the long-term ramifications. If you are struggling with an overwhelming amount of credit card debt, consult a debt settlement company to review your options first and foremost. Then you can make an informed decision on whether or not to proceed with the debt settlement process.

L
earn about debt settlement, debt consolidation, debt relief, and more at Impact Debt Settlement.
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