In 2009, over 1.5 million Americans filed for bankruptcy.  This process can help you either reorganize debt or discharge it altogether.  Before filing, you must receive credit counseling, which is a good side effect of the new, stricter bankruptcy laws.  During counseling, you will receive information on your other options, which may actually indicate that you do not need to file and can find other, less damaging ways to relieve your debt such as debt elimination or debt consolidation.  If you do file, the bankruptcy will stay on your credit report for seven years and make it difficult for you to obtain favorable loans and credit.  It is important to be aware that while bankruptcy can help alleviate debt, it takes an average of 10 to 20 years to fully recover financially.

When, just like millions of other Americans, you find yourself buried beneath an immense mountain of debt than seems practically insurmountable, you are faced with a stark choice: debt settlement or bankruptcy.

Bankruptcy may appear to be the better option because when you file for bankruptcy you are instantly debt-free. The only drawback is that your credit will be ruined and it can take years to build it back up. You won’t be able to buy any big-ticket purchases, such as a house or a car, and apply for credit cards or bank loans. Bankruptcy should only be used as a last resort, meaning you have exhausted all other possibilities to resolve your debt and have no other options.

Before you even begin to think about bankruptcy, consider debt settlement. Debt settlement is the process of negotiating for a lower amount of debt, affordable monthly payments, and a lower interest rate. Most creditors are willing to settle the debt because they know that they will get their money back. The benefits of debt settlement include: a lower balance or forgiveness of debt, a reduced interest rate, and a reduced monthly payment. Even though debt settlement will negatively impact your credit score, you won’t have to spend years building it back up like you would after filing for bankruptcy.

The key to any debt settlement is the negotiation process. Sometimes, it’s best to hire a third party negotiator, or a debt settlement company to hand the negotiating, because they are familiar with all of the credit laws, regulations and procedures involved. A reputable debt settlement company will be able to negotiate the best settlement possible on your behalf. Before you commit to any debt settlement company, do a little background research to make sure that they have your best interest at hand. The goal is to ease your financial stress, not to add to it. All in all, debt settlement is a much better option than bankruptcy when you consider the long-term ramifications.

If you are struggling with an overwhelming amount of credit card debt, consult a debt settlement company to review your options first and foremost. Then you can make an informed decision on whether or not to proceed with the debt settlement process.