When it comes to managing overwhelming debt, many individuals may consider debt settlement as a way to negotiate a lower payoff amount with creditors. However, bankruptcy may actually be a better option in many cases. In this post, I will explain why bankruptcy is a better option than debt settlement.

1. Legal Protection. Bankruptcy is a legal process that provides individuals with protection from creditors and debt collectors. When a person files for bankruptcy, an automatic stay goes into effect, which stops creditors from contacting the individual and pursuing further collection actions. On the other hand, debt settlement does not provide the same level of legal protection and creditors may still be able to pursue collection actions.
2. Faster Resolution. Debt settlement can take months or even years to negotiate a lower payoff amount with creditors. In contrast, bankruptcy can often provide a faster resolution to debt problems, with most Chapter 7 bankruptcies being complete within a few months.
3. Wider Debt Relief. Debt settlement typically only addresses unsecured debts, such as credit card bills and medical bills. Bankruptcy, on the other hand, can provide relief for a wider range of debts, including secured debts such as mortgages and car loans, and priority debts such as back taxes and child support.
4. Better Outcome for Creditors. While debt settlement may seem like a better option for the individual, it may actually have a negative impact on creditors. In many cases, debt settlement companies only negotiate a portion of the debt owed, and creditors may receive less money than they would have in a bankruptcy scenario.
5. Fresh Start. Bankruptcy provides individuals with a fresh start by discharging most unsecured debts and allowing them to begin rebuilding their financial future. On the other hand, debt settlement may leave a negative mark on a person’s credit report and make it difficult for them to obtain new credit in the future.

In conclusion, bankruptcy is a better option than debt settlement for individuals who are struggling with debt. It provides legal protection, a faster resolution, wider debt relief, a better outcome for creditors, and a fresh start. If you are struggling with debt, consider speaking with a New Jersey bankruptcy attorney to see if bankruptcy is right for you. Book a free telephone consultation here: https://jenniferweil07030.setmore.com/