Debt Settlement Programs Vs Filing Bankruptcy - Which One Must You Select?

Feb. 27, 2011 - PRLog -- Which one must you select, debt settlement program or bankruptcy filing? The answer is, you must select the one which you need! This never means that you must just select the one that you want to. As a matter of fact, you need to keep bankruptcy as your last resort and never use it unless truly necessary. Debt settlement must be the preferred method of relief. The reason for such an advice is given below where you can find a comparison between settlement programs and bankruptcy filing.

Debt settlement programs vs. filing bankruptcy:

   * Once you file for bankruptcy, you will lose the credit score and it will go down to zero. This never happens in case of negotiation programs. The credit score will definitely go down when you file for settlement but after the completion of the method, the credit score will be restored to the original level.
   * Once you lose credit score in bankruptcy filing, you will have to suffer for 7-10 years because the bankruptcy report will continue to show up on the credit report for that time frame. During that period, due to loss of credibility, you will fail to get fresh loans. The settlement programs ensure that you retain your credibility and after the settlement is over, you can actually get fresh loans immediately.
   * The method of bankruptcy is very costly because you need to pay the bankruptcy attorneys at a rate of $200-400 per hour. The negotiation programs on the other hand will cost you 6-15% of the overall outstanding. This makes debt negotiation cheaper.

It is because of the above mentioned reasons that the consumers are suggested to first eye on the debt settlement programs and keep bankruptcy filing as the last option.

With the new FTC laws recently passed, debt settlement is a legitimate alternative to filing bankruptcy. Creditors are ready to negotiate and now you won't have to pay a fee unless your debts actually settle.

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FreeDebtSettlementAdvice.com is a matchmaker in the debt reduction industry. We pair consumers up with debt specialists in their area free of charge that are most likely to get consumers the best deal.

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