Debt Solutions - Bankruptcy Or Debt Settlement? Which Makes Sense For You?

When burdened with huge debts, many common debtors contemplate bankruptcy as the easy way to get rid of the debt. It is true that bankruptcy makes you immediately free of all debt. At the same time however, it has many negative and far reaching consequences. A bankruptcy stays on your credit record for 10 years and on the public record forever. If you file for bankruptcy, it becomes impossible for you to get any more credit from the market. Even getting utility services becomes difficult and expensive. Getting basic insurance like health insurance becomes very expensive. What is more it becomes almost impossible to repair your credit ratings.

On the other hand however, settlement does not completely alleviate your debts. Through the process of settlement you can considerably reduce the burden of debt. Nowadays many settlement companies provide facilities for many procedures along with debt settlement. These procedures include debt consolidation in which several high interest loans are paid off with a single low interest one. Then there is conversion of unsecured debts to secured ones. The interest rate on secured loans is much lower than that on unsecured loans. This is because there is collateral attached to the secured loans. By combining these procedures it is possible to reduce your debts by almost 50%. You can then pay them off in installments, which are calculated according to your actual paying ability. These installments never last for more than 48 months, after which you are completely debt free.

Most good settlement companies educate their customers on how to build their credit scores after a debt settlement. In fact they also provide an assessment of their income vs. expenditure and plan a feasible monthly budget. At the same time there is a lot of advice available in the market on how to rebuild your credit scores after a debt settlement. This can be usually done within 3-4 years by following healthy spending habits and proper financial planning. Hence bankruptcy should be really considered as the last resort and every effort should be made to settle the debts at a reduced amount instead.

Finding legitimate debt settlement companies is not that difficult but consumers must know where to look. It would be wise to utilize a debt relief network that will qualify the companies for you and ensure that they are legitimate and have proven themselves. To locate the top performing debt settlement companies in your state check out the following link: