Bankruptcy is certainly one of the most heart-wrenching prospects one would ever consider. There have been a spate of bankruptcy now, but it is hard to imagine how tough or how socially and financially inept a bankruptcy made you look. But all said and done, a bankruptcy is financially and psychologically debilitating, and the whole blow can be pretty tough to overcome. So if you're on the edge of the bankruptcy precipice, then you might well want to consider a little bit of information on debt settlement and which option is better when you compare it to bankruptcy.
Bankruptcy Or Debt Settlement
The similarity that these two is that they are both very difficult words and ones which you would never want to consider. But then again, subtle differences need to be made here so that you can take an educated decision in choosing in debt settlement or bankruptcy.
Bankruptcy
Simple and straight, a bankruptcy will wipe out all your assets. It is one of those rip-your-heart-out situations where all your assets are seized and then auctioned off. You sit in the room watching the proceedings, the proceeds of which you will never get. During a bankruptcy, your assets will almost never receive their true value and will be haphazardly sold off at knocked down prices as if it's a off-season sale.
But then again, your debts will all be eliminated, once and for all and you will never have to worry about them again. But then after bankruptcy you WILL have to worry about getting a job (recruiters rarely warm up to someone who's been through bankruptcy), hitching your credit score back to respectable levels and not receiving any financing till then. You will have to worry about getting a new house, having to use public transportation till you can buy a new vehicle for yourself and the unmentionable social stigma and look-down-upon treatment which you will receive from your friends, relatives and the people you know. Hence you need to consider all the bankruptcy alternatives available to you.
Debt Settlement
If this option is really feasible, I say that you ought to consider it very seriously. In debt settlement, your creditors will give you some time to prepare a detailed reports about your finances. And based on the reports, the creditors will decide whether to allow you some time to sort out your debt.
Simply put, if you think your existing sources of income, your salary, your investment earnings etc are good enough to cover the debt and the debt payments, then dent settlement is something you ought to consider seriously. You will have to calculate all the inflows and the outflows and then give your creditors a certain time frame in which you intend to pay off all your debts to them. It may look severely complicated and a long procedure with unthinkable twists and turns. And yet, somehow, it is most certainly a better bet than bankruptcy.
The reason for this is because debt settlement allows you to keep your assets, unless you have to sell them to cover your debts. But still, it allows you to pick and choose which assets you don't mind giving up. Besides, a successful debt settlement is a win-win situation for both you and your creditors. You, because you retain your assets, your credit score and your social status, and your creditors because they get a lot more money than they would get, should you file for bankruptcy. In fact, if they're sure that you will be able to settle your debts, they might even know down the amounts of debt and help you out. The creditors still stand to gain more than what they would out of your bankruptcy.
In conclusion, I'd like to say that if possible, you really ought to choose debt settlement over bankruptcy. A word of advice: there are a lot of fraud debt counselors and debt settlement people who are out to rip you off. So be careful and make sure you get debt counseling from someone with a good record.
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