- Bankruptcy can have long lasting and serious consequences
- Debt settlement offers an alternative to bankruptcy
- Under debt settlement a skilled negotiator will try and reach agreements with the creditors for large discounts on the debts
Bankruptcy allows someone who is struggling with high levels of debt to start again, free of debt, or through structured payment plans. However, applying for bankruptcy can have serious and long lasting consequences including making it extremely difficult to obtain credit in the future and preventing you from working in certain professions. It is a very serious step to take and anyone considering bankruptcy should take legal advice from a bankruptcy lawyer to make sure it is the best option for them.
Bankruptcy is not the only option if you find yourself drowning in debt and there are alternatives that should be considered before any decision is made about filing for bankruptcy. In America a common solution is debt settlement. With debt settlement you allow a skilled debt negotiator to talk to your creditors and try and agree deals to settle the debts for much less than what is owed. This way the creditor at least gets some of the money they are owed in a shorter time frame but agreeing that the creditor will take less than they are owed is not easy. While agreements are being negotiated the debtor can be earning and paying the money into a separate account and these savings can then be used at a later date to pay off the creditors. The whole process usually takes between two and four years.
While there have been some well publicised cases of unscrupulous debt settlement companies, generally if you find a good debt settlement company, they will advice you on whether it is worth pursuing a debt settlement agreement or just to file for bankruptcy. You should approach a debt settlement company with an established reputation and a long history of sorting out debt problems. You can make an application with several different companies to get a good feel for each before making a decision.