Bankruptcy and the debt settlement are the two main methods which people who fell into debt are selecting.
Although both of them are debt relief methods, there is a big difference between them.
Mostly the effects of them or the results of them are comparatively different.
Debt settlement brings true relief to your life and releases you from your financial issues while bankruptcy brings a completely different after effect.
Bankruptcy, on the other hand brings more trouble to you although at first it releases you from your debts.
However, when comparing bankruptcy with debt settlement, both of them have advantages as well as disadvantages.
Although bankruptcy is a good solution to get away from your debts, the results it follows are not that much agreeable.
But, when considering debt settlement, although you have to spend a little bit of money, it somehow brings eternal relief to your life.
If you filed bankruptcy, it naturally releases you from all your debts, even putting the credit companies in to more trouble.
Here, although you are able to stay away from paying off your debts, you have to give a compensation for it.
It means, you do not have to pay money directly, but, you have to risk at least your property for this.
However, it also destroys all your credit history.
At the same time, filing bankruptcy may destroy your eligibility to get a loan for ten ore years, which is a greater loss to you.
Moreover it harms your good reputation as well.
But, if you selected debt settlement as your solution, then you can easily settle your debts after having few negotiations with your creditors.
Here, you have to go through a big process.
First you have to select a legitimate company to deal with.
Then discuss with the professionals or the counselors in those settlement companies, revealing your true present economical status.
You have to mention the exact amount you are capable of paying off.
Therefore, the counselors can ask for a reduction of your debts from your creditors convincing them that you will pay off that exact amount for sure.
Here, the whole process depends on the negotiation ability of the counselor.
Likewise, by showing your creditor the negative aspects they have to pay if the debtor selected bankruptcy, the counselor somehow tries to obtain a reduction of your debts.
Thus, it is evident that although here in settlement, you have to pay at least half of your amount, it is much wiser than going for bankruptcy.
Accordingly, when comparing with bankruptcy, debt settlement is obviously the wisest method to practice.