Who are your unsecured lenders? You should know the answer to this question if you are planning to go in for bankruptcy.
This is because your unsecured lenders stand to lose the most when you request the court to help you out avoid your debts.
When you find that your best friends and relative is working as an employee with the credit card issuer and when you find that your spouse friend is working in the unsecured lenders from whom you have obtain the personal loan, you will realize that your decision to go in for bankruptcy is not going to affect just your finances and your credit score but also your social relations.
You may not have borrowed money from your friends and your relatives directly.
However, their financial well being is dependent on the well being of the credit card issuers and other such service providers.
In such a scenario, it is obvious that you will be treated with contempt when you meet those of friends and relatives again.
Nine out of ten individuals have absolutely no understanding of how this process works.
They simply presume that they will be answerable to the court and nothing beyond that.
That is not the case.
They will be answerable to their friends and relatives, except that the process shall be informal.
If you go in for debt settlement, you will still be repaying your debts on time.
The only difference is that the balance amount will be reduced by the lender.
This will be a mutually determined act.
This means that the lender will bear the responsibility of managing the losses.
In such a scenario, nobody can blame you for causing a loss.
Instead, you would be praised for trying to repay the maximum amount possible when you could have opted for bankruptcy if you wanted to.
Your credit score will take a hit but that can be prepared by making use of professional credit repair service providers.
However, how are you going to repair the strained relations with your friends, relatives and your contact circle? Contacts that you have developed over many years cannot be prepared in a jiffy, can it? This is one simple reason why debt settlement is much better than bankruptcy.
However, most individual simply ignore this fact and focus on the financial aspect only.
Such an approach is only going to increase the chances of complications at a later date.
Before to settlement which is simple, mutually beneficial and will ensure you become discipline with your finances as a time goes by.