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Debt settlement has many advantages over bankruptcy. Both debt relief options will clear your unsecured debt. However, their similarity stops there.

In bankruptcy, you will likely lose your house, car, and other secured debt collateral as well as your unsecured debt. This is especially true when the car, home or other collateral is not necessary for your well-being, such as a vacation home or a second car. With debt settlement, your secured debt is completely unaffected.

The other major difference between debt settlement and bankruptcy is that bankruptcy fairly ruins your credit for at least five years. However, debt settlement typically improves credit dramatically. This is due to the fact that the debt shows “paid as agreed” on your credit report, even if you don’t pay the full amount. This makes rebuilding your credit much easier.

Finally, debt settlement services typically do not stop at getting rid of your debt. They will also help you budget and make lifestyle changes to prevent you from getting into debt again in the future. This is a benefit that no bankruptcy lawyer will ever offer.

This entry was posted on Monday, March 30th, 2009 at 5:59 am and is filed under Business.