People look into debt resolution options for a variety of reasons, but the idea of needing assistance to pay off your debt can be daunting to many people. It can be hard find a solution that seems right for you, and bankruptcy often seems like the only way out of the hole. However, other options do exist, and they are often a wiser choice than bankruptcy.
One of these options is debt settlement. As you weigh potential debt solutions, consider these three reasons why debt settlement is a better option than bankruptcy.
You, Will, See the Same Result:
Debt settlement will achieve essentially the same result as filing for bankruptcy. Chapter 13 and Chapter 7 are the most common types of bankruptcy. By choosing to settle, you will see lower monthly payments with faster payoffs, similar to filing a Chapter 13. Also similar to a Chapter 13, you will be able to keep all of your assets. Like a Chapter 7, debt settlement works best when you have a large amount of unsecured debt that needs to be refinanced.
This means that debt settlement provides the best services offered by both types of bankruptcies while allowing you to enjoy less disruption. Creditors will stop harassing you for money, and you will have more money available because you are paying less towards your debts. In addition, debt settlement can allow you to pay off all of the settled debt in as little as two years, while a Chapter 13 bankruptcy can last up to five years.
At the very least, it's wise to speak with a professional and review all of your options — including debt settlement — before resorting to bankruptcy.
Your Credit Will Thank You:
One of the best things about debt settlement is that it won't affect your credit as dramatically as filing for either type of bankruptcy. While debt settlement still shows up on your credit and temporarily affects your credit score, the damage is manageable. The big reason why it is less damaging is that it stays on your report for only seven years from the first date of delinquency. Bankruptcy will remain on your credit for anywhere from seven to 10 years from the date of filing.
You'll Experience Fewer Long-Term Consequences:
Not only will any debt solution affect your credit, but it can also impact your life in other ways. As previously mentioned, by choosing debt settlement, you can avoid the loss of assets that you may experience when filing a Chapter 7. In addition to this, you leave yourself the possibility of acquiring new assets in the future. Even after the seven to 10 years that the bankruptcy stays on your credit, you are required to disclose whether or not you have ever filed for bankruptcy when you apply for any type of financial assistance or employment in the future.
Bankruptcy can be the answer for some people. However, debt settlement may be your best choice in order to avoid the drawbacks of filing for bankruptcy. Debt is specific to each person, but the solution doesn't have to be. Debt settlement can allow all types of people the relief they are in need of.