Popular Debt Relief Methods – Filing Bankruptcy Vs Debt Settlement

Popular Debt Relief Methods – Filing Bankruptcy Vs Debt Settlement

The plummet in the American economy has rendered many people in a difficult financial situation. The bankruptcy cases are on the rise and credit companies are finding it difficult to regain the amount of credit given to people. The federal Trade Commission (FTC) has taken various steps to ensure that no one suffers because of the economic situation. New laws and regulations have been brought into force. If you are in debt and are worried about its repayment because of your difficult financial situation, go for one of the various debt relief options available like – debt settlement, debt consolidation, credit counselling, filing for bankruptcy, etc. The choice of a suitable method of debt relief is dependent upon various considerations. Let us compare filing bankruptcy and debt settlement as debt relief options.

Debt settlement as the name suggests is a process of negotiations carried out between the creditor and the debtor himself or through a debt settlement company to mutually agree to a decision regarding reduction or settlement of debt to a lower amount, which is then considered as the full and final payment of the whole amount of debt. On the other hand, bankruptcy is considered as the last option by most people. There is a social stigma attached to it and also it negatively affects the credit score of the individual who files for it. The credit worthiness of an individual who files for bankruptcy is ruined to a greater extent than a settlement and it takes a lot of time for him/her to regain that credit score and confidence.

Financial settlement is a legitimate option of debt relief and is preferred by many people over bankruptcy. Distressed debtors who opt for debt settlement have to pay approximately between thirty to fifty per cent of the total debt that they owe to the creditors. The intervention of government has also made financial settlement a more secure and convenient way to achieve debt relief. Banning of upfront fees charged by settlement companies and tax breaks allowed to those going for debt settlement has made it a preferred option.

Debt settlement is a legitimate alternative to filing bankruptcy and often makes sense for consumers on the verge of bankruptcy. There are also other debt relief options available so it would be wise to speak with a debt relief specialist to go over your different options. For a free consultation from a debt relief specialist in your area check out the following link:

freedebtsettlementadvice.com is a matchmaker in the debt settlement industry. They have paired up thousands of consumers up with debt settlement companies who are most likely to get consumers the best deal.


contact us for free debt advice = 8883613619

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