Business man shaking a piggy bankOverwhelming debts can affect different aspects of your life such as your work, personal relationships, and health. When you owe a large amount of money, the whole situation may seem hopeless, leading to sleepless nights and increased stress.
While there are no quick fixes to get you out of debt, bankruptcy and debt settlement may offer some relief. Just be sure to examine their pros and cons to help you choose the right one that suits your situation.

Bankruptcy

While filing for bankruptcy seems like a bad move, it can help you start anew, especially when you’re drowning in debt. Bankruptcy offers a legal protection that stops creditors from harassing and pestering you, allowing you live a normal life.

Barski Law Firm PLC, debt relief lawyers in Scottsdale, notes that while it cannot wipe out all your financial obligations, it can eliminate certain types of debt, as well as temporarily stop eviction or foreclosure. Keep in mind that it cannot eliminate child support and alimony obligations, eliminate non-dischargeable debts.

If you’re considering bankruptcy, it is best to see a reliable financial planner or educate yourself about can happen to your finances or credit history. And if you decide to declare bankruptcy, it is best to consult an experienced bankruptcy or debt relief attorney.

Debt Settlement

This is a form of debt repayment wherein the creditor agrees to receive less than the amount owed. In this case, you will need the help of a debt settlement company to negotiate with the creditors or credit card companies. Keep in mind that it is not recommended to make calls or do the negotiations on your own, as this may only aggravate the problem.

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A debt settlement company may reduce your debt for about 25 to 50 percent, but do take note that the company required a payment for its services. There are also other downsides to consider like tarnished credit report and having no guarantee that you’ll settle all your debt. This also won’t stop credit collection, so creditors can still contact you or even sue you.

These are just two options that can help you deal with crushing debt. Both have advantages and disadvantages, so make sure to examine them. If you, for instance, choose debt settlement but can’t get creditors to agree on a settlement, you may have to declare bankruptcy. In this case, it is best to hire an experienced bankruptcy attorney.

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