Bankruptcy VS Debt Settlement - Which Debt Relief Option Is Best?


Bankruptcy and debt settlement are those debt relief options which have been prevailing in markets for a long period of time. Both these methods are legal and functional under the full support of government. It has been observed that people face lot of confusion when it comes to make a selection between these two options. Through this article people will be able to know that which debt relief option is better for them.

Bankruptcy is the traditional approach for elimination of debt while on the other hand debt settlement is the modern technique for the reduction of unsecured debt. In bankruptcy you have to pass through many legal formalities and other official tests while on the other hand in debt settlement you do not have to go through from different legal formalities and other legal paper work. The process of bankruptcy is a risky thing because all the assets of a person are in danger because the decision which court makes about them is final. In debt settlement you don't have to fear about losing your property. Moreover, your personal assets also remain in your custody. The major negative point of bankruptcy is that it completely destroys the credit rank of a person due to which we can say that a person becomes unable to get any cooperation from banks and other financial institutions in future. Though debt settlement also causes a bad impact on credit rank but this impact only lasts for short time and once you pay off all your liabilities then you will be able to use bank facilities again. The process of filing bankruptcy petition is expensive as the legal lawyers charge high amount of fees in return of their services, on the other hand the process of debt settlement is not expensive as the settlement firms charge minimum amount of fees in return of their services.

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New laws of settlement are making this option more reliable and genuine and because of this people are finding themselves financially secure and safe, on the other hand the new laws of bankruptcy are making this process more uncertain and complicated. We can say that this is why people are now scared of adopting this method.


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