When you are so far in debt you cannot afford to continue your payments without needing to file for bankruptcy what do you do? Should you try to attain a debt settlement or file for bankruptcy anyways? Which program can harm you in the long run more effectively, and which can help you in the long run more effectively? This really depends on your current situation.
What is debt settlement? A settlement of debt is a program in which when you are faced with bankruptcy you can speak with the company in which you are in debt to, explain you are in a situation as to where you need to file for bankruptcy due to the debt being so severe, and make a compromise as to where the company will reduce your total debt anywhere between 5 and 50 percent of the total debt owed to prevent you from filing for bankruptcy.
You can also hire a 3rd party company which can speak with your debt holder on your behalf to better your chances of achieving a high debt settlement on your total debt.
What does someone need to qualify for a debt settlement? To attain a settlement of debt a person needs to have accumulated a significant amount of past debt in which proves of their inability to make future payments, their credit will have been significantly damaged, and due to non-payments the total debt will be building up even higher than it had originally stood with service fees, interest fees, and much more.
Some settlement programs will also require a down payment towards the total reduced debt, so the person would need to save up some money before trying to gain the settlement.
Is a settlement better then a bankruptcy? Bankruptcies are very damaging to showing a person's reliability to making payments on time, the person cannot attain credit cards, financing, or more for seven years or more.
With a settlement as long as the future plan is not broken to make timely payments and stay out of future debts then a settlement is very beneficial.