Bankruptcy – it is considered to be one of the greatest debt solutions. Bankruptcy is that option through which you as a debtor may be able to discharge almost all of your debts. So, majority consider this option when in serious and complex debt problem. However, it is extremely important for all of the debtors to know that bankruptcy has a huge negative effect on your credit. So, it is better to avoid the same if you can easily solve the debt problem you are in; for, there are various other debt solutions that you can avail of.

Bankruptcy or Other Debt Solutions

The answer to the question as to which is the better debt solution – bankruptcy or the other debt relief options depend on the debt situation you are in and your finances as a whole. If you are too deep into debt and if your finances are in no way stable so that you can pay off your debts, it would be better to opt for bankruptcy.

However, if you have only few debts like the some of the credit cards that you have missed payments on, and a couple of payday loans, you can try out the simpler debt relief options. The simpler debt relief options like that of debt settlement, debt consolidation, debt management in general does not have a huge negative effect on your credit like that of bankruptcy. In this, you need to hire a bankruptcy lawyer san diego.

Debt settlement is an option that results in reduction of the outstanding debt amount. Thus, this renders it easier for you to make the debt payments. However, you are required to miss payments before requesting the creditors to settle the debts. Debt consolidation is that option through which the debts that you have gets consolidated as a single debt, in addition, the interest rate on the debt gets lowered too. This helps with debt pay off. Debt management is all about managing your debts. So, you can see that these options help you with paying off the debts that you have.

On the other hand, in case of bankruptcy, you will see a huge reduction in your credit score. Thus, it can become quite a problem for you to get any new credit. You may also have to lose almost all of your assets in the process of paying off the creditors. If you file chapter 7 bankruptcy, the bankruptcy trustee takes away your assets and liquidates those to pay off the creditors and lenders.

However, there are some advantages of bankruptcy too. Whenever you file bankruptcy, it brings over a stay order. This is legal and so all of the creditors, collection agencies and lenders are required to halt their collection proceedings with regards to your debts. This does not happen with any of the other debt relief options.

So, the main thing is that, you will have to decide for yourself which is the better option; based on your finances and your debt situation.