Is debt settlement better than bankruptcy? We suppose it would depend upon whom you asked. If you were to ask a bankruptcy attorney who makes his living off of filing bankruptcy for his/her clients we guess the answer would be yes, on just about every client. The biggest problem with filing for bankruptcy as a way of freeing yourself from debt is that it will seriously affect your credit for years to come, it may even result in you losing property, and in some cases, you may end up having to repay your debts anyway:
- A bankruptcy can leave a terrible stain on your credit report for 7-10 years.
- In a Chapter 7 bankruptcy, you’ll be required to sell off all your property that isn’t protected by law.
- In a Chapter 13 bankruptcy, your debts won’t be wiped out. You’ll have a bankruptcy on your credit report and still have to set up a repayment plan to pay off all or part of your debts.
- With a bankruptcy on your credit report, you’ll find it difficult to get affordable interest rates when you try to buy a home or a car or apply for some other form of credit.
- A bankruptcy can stay on your official court records for more than 20 years – sometimes for the rest of your life – and can hurt your chances of being approved or even hired when you apply for a job or a loan or try to rent an apartment.
Debt settlement, on the other hand, can be a better way to help free yourself from debt:
- Unlike a bankruptcy, Nationwide Debt Reduction’s debt settlement program will NOT show up on your credit report. Although any of your debts that are settled for less than the full amount will typically be noted as “settled” rather than “paid” on your credit report, no one will be able to tell just by pulling your credit that you’re working with Debt Relief.
- Once you pay off your new, lower balances, creditors will report to credit agencies that your debts have been settled, which means you can get out of debt without having to lose your property or set up a lengthy bankruptcy repayment plan.
- Although your credit score may drop while you’re in a debt settlement program, once you’ve successfully completed the program, your unsecured debts will be paid off, and you’ll be able to start taking steps to get your life back – without a bankruptcy to hang over you and your credit report for as long as 10 years.
- With debt settlement, there are no negative court records that follow you around and hurt your chances for future employment, leases, or loans.
To learn about this post, or if you are in need of help regarding your debt, please feel free to contact Nationwide Debt Reduction, Inc. (NDR) toll free at 1-800-890-6658. Our professional advisors will be more than happy to answer your questions. If it is after hours (8:00 am -5:00 pm PST) (11:00 am – 8:00 pm EST) you may go onto our Contact Us website by clicking here, fill out a short form, and one of our advisors can get back to you when it is most convenient for you. We are located in the city of Mesa, Arizona in the Phoenix metropolitan area.