Thinking about comparing bankruptcy with one of those debt settlement services that are constantly on late night TV and radio?
What’s the difference anyway?
There are several differences, and bankruptcy typically comes out as the better option. Consider that in bankruptcy, you can eliminate virtually all unsecured debts, as opposed to the 50% that most debt companies crow about.
In a bankruptcy, there is no problem dealing with creditors who refuse to settle — they just don’t have that option, period.
While a bankruptcy is a hit on your credit rating, it isn’t the constant drain on your score that often happens with debt settlement. While you are funding your settlement account, your credit is steadily deteriorating; after a bankruptcy, you have a chance to build it back up.
And almost always, bankruptcy is cheaper in the long run. Legal and filing fees are a one-time cost, not the ongoing monthly expense of debt settlement commissions.
If you would like to know more about the differences between debt settlement firms and bankruptcy, there is a great post about it here.
By Doug Beaton