How does debt settlement compare to bankruptcy? Bankruptcy shows as a public record and will usually remain on your permanent credit profile for up to ten years. This option should be utilized as a last resort because of the long lasting effects it carries. Also, there has been recent legislation which makes it much more difficult to file. Your accounts will be shown on your credit as having been included in a bankruptcy and will report that way for up to ten years. This is in addition to the public record showing your filing and discharge dates.
Debt settlement can also have a negative affect on your credit profile in the short term. Once your accounts have been paid at reduced amounts they will report as “Paid or Settled at a lesser amount”. However, once the accounts are paid in full they will report as closed with a 0-balance. This will improve your debt ratios and debt settlement is usually the fastest way to get to that point outside of bankruptcy. If your goal is to eliminate your unsecured debt as fast as possible, without filing bankruptcy, then debt settlement may be right for you. Please call or apply online so we can offer you our free expert advice.
