When you have more than one solution available to a problem, what do you do? You have to compare both the options so that the better one can be identified. How are debt settlement and bankruptcy related to each other? There are both solutions to solve the unsecured liability problems. Here, how does a loan taker select between debt settlement and bankruptcy? Which factors have to be taken into consideration and what makes debt settlement a better alternative. Let's look at the details below to grasp a better explanation.
Comparing debt settlement and bankruptcy in a comprehensive manner
When you are comparing two options in a complete manner, you should make sure that no stones are left unturned. For instance, people prefer bankruptcy due to the following reasons
1. It does not cost them anything and they become less less without taking any kind of trouble
2. They do not have to take the trouble of looking for settlement companies and scanning them
3. They get rid of collection agents and recovery teams because nothing can be recovered from bankrupt loan takers.
If you loot at the points mentioned above, you will think that bankruptcy is the most mouth watering offer. However, facts are very different? Between bankruptcy and a settlement deal, people prefer settlements more as compared to bankruptcy. This brings us to the negative effects of bankruptcy. Let's look at them.
1. It is a big trouble for the credit score of the loan taker
2. It spoils the customer record
3. In most cases, credit card companies do not deal with bankrupt clients even when their financial conditions improve.
4. You are not allowed to get any kind of financial help in the form of secured and unsecured loans
Thinking and planning beyond recession
Recession is not there to survive forever. One fine morning, you will wake up and see that the economic conditions have returned to normal. Here, get rid of your credit card bills in a way which does not harm your future. Between debt settlement and bankruptcy, debt settlement is an option which legally eliminates your debts without crashing our investment plans. It is legal and highly recommended in the United States. People belonging to all phases of life including students, working employees and businessmen are choosing the first option between debt settlement and bankruptcy. However, you should be very careful about illegal companies and scammers.