If you are facing an insurmountable amount of debt, chances are, your monetary obligations may be causing you to suffer a lesser quality of life. You might be spending most of your time researching the available options, but with so many available outlets for relief, you could be uncertain how to proceed.
In your search for relief, you may have come across numerous offers for debt settlement. Although at first glance, this might seem exceedingly enticing, you might want to consider additional avenues, as filing for bankruptcy could be a much more viable option.
Debt settlement versus bankruptcy
Perhaps you place a high priority on your financial future and wish to choose the path that will give you the best chance at regaining your financial health. Although you might be under the impression that debt settlement is a quick process, the outcome could be quite the opposite, and some ways that a bankruptcy might be more beneficial could include the following:
- Time frame: While making one payment as opposed to many may be an attractive notion, the amount can still be substantial, and a debt settlement can take years to complete.
- Protection from creditors: Even if you have an arrangement, debt settlement does little to protect you from creditor harassment or even legal action. In bankruptcy, the automatic stay can provide you with protection from creditors throughout the process.
- Settlement amount: Even if you negotiate a lesser amount, over time, interest may continue to pile up, and the total amount of your settlement could approach the initial amount owed. In bankruptcy, many of your debts may be eligible for discharge.
- Impact on credit: Bankruptcy will inherently have an impact on your credit. However, debt settlement can have a similar effect, if not worse, and with bankruptcy, you may be able to begin rebuilding your credit shortly after completing the process.
However, there is no set path for debt relief that is correct for everyone, and with many available options, you might find it exceedingly beneficial to speak with someone with experience in the area.
Pursuing debt relief
With numerous crucial aspects to cover and the potential gravity of the outcome of your chosen path, you may be feeling somewhat overwhelmed. However, you don’t have to go through this alone, and seeking guidance from someone with extensive knowledge in federal and New York state bankruptcy laws could help you make informed decisions regarding your financial future. Obtaining advice might help you gain an understanding of each option and their respective outcomes, which could make it much easier to choose the correct path with which to pursue financial freedom.