If I am unable to pay my bills should I try debt settlement or file bankruptcy?

Debt settlement is one method to getting caught up on the funds you owe lenders. If you are in a situation to use this option, it may be beneficial. Many people considering bankruptcy, on the other hand, are not able to use debt settlement. In some cases, it may be better for those who can afford debt settlement to instead file bankruptcy, if it will give them a better financial future. Making this complex decision can be confusing, but the aid of an attorney will help in either situation.

Choosing Bankruptcy or Debt Settlement

One of the factors to keep in mind in regards to debt settlement is the need to have access to funds. Most debt settlement involves negotiating a one time payment to a lender to settle the debt in full. In some cases, the settlement may take place over a period of time, such as six months. However, it often involves significant payments towards the debt, much higher than the minimum payments on credit cards.

On the other hand, if you do not have access to larger sums of money, filing bankruptcy may be a better option. This option is for those who do not have the financial means to pay off debt. Keep the following in mind:

• Both will hurt your credit score, but bankruptcy remains on the credit report for up to ten years.
• You may be unable to qualify for bankruptcy if you make too much.
• Filing bankruptcy may help you get out of debt faster.

Discuss your options with an attorney. You may find that one option is best for your situation.