Debt Settlement or Bankruptcy

When given a choice some believe that one should always pick debt settlement over bankruptcy. Despite what others may believe, individuals who are put in this situation should do the research and decide for themselves which option is best for them. The advantages and disadvantages of both debt settlement and bankruptcy should be weighed, and then people will be able to make an educated decision. With the condition of the economy being as bad as it is right now more and more families are struggling with debt. A lot of individuals have lost their jobs due to downsizing or have had to learn how to maintain their way of living after suffering a cut in their pay. As a result, some individuals have to use outside companies for credit in the form of loans and/or credit cards. If credit cards and loans are not managed properly, they will cause serious financial problems.

Some individuals find themselves in situations where they cannot see any way possible to pay the loans off. When people consider themselves to be in this type of situation, they believe themselves to be in liquidation and want to label themselves as insolvent. Filing for bankruptcy is a serious matter and individuals should make sure that they research their situation thoroughly before choosing this option. Anyone who is subject to liquidation processing will also endure a variety of disadvantages. The biggest problem that is associated with filing for bankruptcy is how expensive this decision is. One expense associated with bankruptcy includes lawyer fees and everyone is aware of how expensive lawyers can be. Individuals who file for bankruptcy will have a hard time bouncing back from this occurrence; it will ruin an individual’s entire financial status.

Debt settlement is a better option to choose when the only other option is bankruptcy. Debt settlement reduces the cost of dues by using a process called mutual negotiation between the individual and their lender. Recent changes have been made that have reduced the possibility of fraud occurring with debt settlement. The changes prevent relief companies from cheating individuals and allow them to receive tax exemptions. With all the changes that have been put into effect ,debt settlement is the cheaper option.

Consumers will have a wide variety of different settlement companies to choose from,  no matter what state they reside in; but of course some companies will be more experienced than others, so research should be done to ensure that the right company is chosen.

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