Jul 14 2009
Bankruptcy or Debt Reduction-Making a Choice
We are living in very unstable times, financially and many people have been forced to deal with some unpleasant circumstances in their lives. Debt reduction vs bankruptcy is a decision that individuals are being faced with and the choice is not an easy one.
In some cases, the choice will be simple. You may have only one option that will suit you finances at the current time. However, if you start evaluating you options at the first sign of financial duress, you are going to have more choices.
Credit counseling is a less drastic alternative than bankruptcy, if your finances can handle this method. The reason I say this is because your credit will be negatively impacted. A bankruptcy can remain on your credit report for up to 10 years. There are a number of financial experts that have filled bankruptcy and are now millionaires. They will tell you that the fact that they filed bankruptcy has haunted them for a long time.
Debt settlement is another option for getting out of debt. This is not an ideal option either. If you have debt that has been charged off and you want to resolve and can do so quickly, debt settlement will work for you. Individuals are easily enticed by how quickly debt settlement companies say their clients can be debt free. I am not saying this is not true. But if go from making on time payments or close to it, to not making payments at all so that you can build escrow with a debt settlement company, you are probably asking for trouble.
If you are wondering can you be sued for credit card debts, the answer is yes. Both bankruptcy and debt settlement is going to ruin your credit. If you have filed bankrutcy, your lenders cannot take legal action against you and this is a major difference. If you read the forums, you are finding more people that have been sued by their lenders while they were going through the debt settlement process. Debt reduction vs bankruptcy is a tough question. One size fits all, does not apply to personal finance. Just like an illness, early detection affords you the most options for treatment and recovery.
