For those of us facing a financial crisis, the word bankruptcy can ignite powerful emotions. The thought of losing your assets, ruining your credit and the embarrassment you face with friends and family can make you pull your hair out. Filing for Chapter 7 can:
-Tarnish your credit report for 7-10 years.
-Require you to sell off all of your property not protected by law.
-A Chapter 13 bankruptcy will not wipe out your debt, and still affects your credit rating.
-Bankruptcy will make it difficult to obtain affordable interest rates in the future.
-Bankruptcy can stay on your court records for up to 20 years , and can hurt your chances of getting a job or renting an apartment.
Debt settlement is a better alternative for several reasons:
Unlike Bankruptcy, most reputable debt settlement programs will NOT affect your credit report. If you choose to settle a certain debt, it will show up as "settled" on your report. Potential employers, or others looking at your history will not be able to tell that you are working with a debt settlement company.
Good settlement programs will lower your balances. Once you pay off your new balance, creditors will notify the credit agency that your debt has been settled. Debt settlement allows you to settle your debt without losing your property or adhering to a lengthy bankruptcy repayment plan. Even though your credit score may drop while in a debt settlement, your debts will be repaid and you can start rebuilding your life once you have completed the program. Plus, you will not have a 10 year stain on your credit report or negative court records that follow you around for even longer.
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