Debt Settlement vs Bankruptcy Here Is A Comparison To Help You Make The Right Decision!

Debt Settlement vs Bankruptcy: Learn about the differences here and make an informed decision about bankruptcy or debt settlement.

If you are looking at debt settlement vs. bankruptcy to get relief from your debts, make sure that you weigh your options carefully.

What could appear to be a fast, easy diy debt settlement or diy bankruptcy option could wind up costing you big time, not just in filing fees or attorney’s fees, but also in loss of property and considerable damage to your credit report. All things considered, bankruptcy probably just isn’t worth it.

Debt Settlement vs Bankruptcy 7 Tips You Must Follow

Even bankruptcy attorneys will tell you that bankruptcy is a last resort method of debt relief. It should be used when your back is absolutely against the wall and you have no other options. Bankruptcy will significantly damage your credit, staying with you for years.

It can have a negative, long lasting impact on your financial future. There are many alternatives to bankruptcy and you should look into at least a few before filing.

When looking at debt settlement vs bankruptcy, debt settlement is a popular option. However, most people do not understand how it works or what it can do for them.

What is Debt Settlement?

Debt settlement is a process that involves negotiating with creditors for better terms on your debts. They may ask for forgiveness of the debt, lower payoff or lower balance.

They may also settle to get a reduction in interest or in the monthly payment. These terms may include any combination of these elements, or all of them.

Can I do Debt Settlement Myself?

The beauty of diy debt settlement is that you don’t have to pay anyone else to do it for you. You can do it yourself. Of course, you can always opt to use a debt settlement company or even hire an attorney, but if you choose to do it yourself, you most certainly can.

Debt Settlement vs Bankruptcy Do I Need Cash on Hand?

You will need to have cash on hand in order for debt settlement to work. A settlement can be as low as 25% on the dollar and as high as 70%. This can result in deep discounts on your original, but in order for it to work, you must be able to forward to settled lump sum directly to the collector, creditor or representative for the creditor. Payment plans don’t typically happen when you are settling debts.

How can I Protect Myself?

You will need to follow up on your settlement with the agreed upon terms clearly outlined in a concise written document. Failure to adequately document your debt settlement could result in your having to pay more money even after you have finalized your settlement and paid the agreed upon sum to the creditor. Steer clear of verbal deals, they are useless. Get it all in writing.

Is Debt Settlement Easy?

Parts of debt settlement are easy. When comparing debt settle vs. bankruptcy, it is far easier than the alternative. But getting in touch with a live person can be a challenge. Many companies that deal with debts like collection agencies and credit card companies, strive to make it nearly impossible to talk to a live person or a person with some authority.

Will all Creditors Negotiate with Me?

No. Some credit card companies have a cap at 10% and others have a strict policy against negotiating at all. But that should not stop you from asking. When looking at debt settlement vs bankruptcy, a few doors slammed in your face is far better than carrying around the lasting effects of a bankruptcy for 7 to 10 years.

When Should I Negotiate?

Very few creditors will even entertain the thought of negotiating until you are several months in arrears. After three or four months, they will begin to get more receptive.

The end of the month is a good time to negotiate because many collectors are doing a final push to reach goals and will be more inclined to settle for amounts that are better for you.

In debt settlement vs. bankruptcy, the choice is clear. Debt settlement is a much more appealing option.

You can visit the Better Business Bureau's website and find reports on hundreds of Debt Elimination Programs.

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