Should I File For Bankruptcy Or Do Debt Settlement?
In Credit Repair of CreditGuru (September 1, 2010 5:06 am)
A common situation that millions of people wrestle with every year is shall they file for bankruptcy or do some form of debt settlement. When looking at both options side to side it’s clear that debt settlement has many more long term benefits over bankruptcy. Some of the different benefits that settling your outstanding debt has over bankruptcy would include:
The effects of negotiating your debt doesn’t last as long: In general when you settle your debts with your creditors will help improve your overall credit score over the long term. What happens is when you are doing the negotiation your credit score will drop; once you are consistently making payments to your creditors under the new plan will help improve your credit rating. When you file for bankruptcy the effects of the filling can last for up to ten years. This means that even after you have paid back a certain percentage of what is owed your credit score will still be affected by what has happened as a result of the bankruptcy.
You save more money by settling your debt: When you are performing a debt settlement you are saving time as well as money. What happens is you are negotiating directly with your creditors this means that to make sure that you are paying what you owe them; they are willing to waive interest and late fees. In many cases they are even willing to reduce the overall debt that you’ve by up to 60%. As compared to bankruptcy where you have to pay attorneys fees, court fees and then maybe the debt could be discharged but at what cost? You still have paid sizeable amounts during the bankruptcy process which could mitigate any advantage that you were seeking.
Clearly filling for bankruptcy should only be considered as a last resort. The best way to reduce the overall amount of debt that you owe is to seek a settlement with your creditors. This will have the least negative effects on your credit and you could save money in comparison to bankruptcy, allowing you to be able to overcome your financial problems quickly.
Lastly, by researching and comparing as much debit consolidation providers, consumers will be able to determine the company that meet your financial situation properly, plus the cheaper interest rate the debit consolidation market is offering. For example, see our latest debt management service review: Lower My Bills Review.
Nonetheless, it’s advisable working with a seasoned and reputable debit counselor before arrive to any conclusion, this way you save time through specialized advise and money by getting better results in a short period of time.
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