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Which hurts a credit score more, bankruptcy or debt settlement?

Although just about everyone in the Tampa area, and everywhere else, is aware of the perils of debt, many people still manage to get themselves into financial problems on a regular basis. It’s never a good idea to be in debt, but there are ways to get out of your financial troubles if they have become a burden that’s too big to overcome. However, you should be sure to make the right choices when it comes to debt relief.

Anyone who is in debt might wonder what he or she can do to get out from underneath his or her financial problems. He or she may even be considering debt settlement or bankruptcy. Both of these options can be helpful, but they do have differences. In general, filing for bankruptcy will cause more damage to your credit, as Chapter 7 and Chapter 13 bankruptcies stay on your credit report for 10 years.

Debt settlement, on the other hand, usually requires a person to work out an agreement to pay off a portion of his or her debt. That means a person will have to save up a lump sum in order to make a settlement offer. Either way, one’s credit will most likely be damaged and his or her creditors could take him or her to court.

Opting for some kind of debt management plan instead of debt settlement or bankruptcy is usually a better option. However, if you have reached the point where debt management is no longer an option, then you might want to meet with an experienced bankruptcy attorney to help you make your next move.

Source: Fox Business, “Debt settlement vs. bankruptcy: Which is worse for credit score?,” Jane McNamara, April 23, 2014.

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  • "When I first came to the decision to file for bankruptcy, I had no idea where to start. I began researching attorneys on the internet and came across the information for Tim Sierra. Since he specialized in bankruptcy and had a lot of experience......"
  • The process of going through bankruptcy could be very overwhelming but Tim made me feel at ease and I felt that my needs were being taken care of. I truly feel that he had my best interests in mind and the lines of communication were always open....
  • "I had to file a Chapter 7 bankruptcy. I didn't know anyone who could refer someone so I took a chance and just looked on the Internet. I don't remember exactly why I chose Mr. Sierra, but I am glad I did..."
  • He was honest, straightforward, and hard-working. In my case I ended up with some extenuating circumstances and he handled the matter professionally even though I'm sure the work probably exceeded what he originally felt it would be....
  • I don't ever write reviews, and I had no prior relationship with Mr. Sierra. This review is simply being written as a service to others that Mr. Sierra is an excellent attorney and should be considered for your needs if you need one....
  • "I'm very happy to have been referred to Tim for my Chapter 7 filing. He was knowledgeable in his field and very responsive in replying to any questions or concerns I had. Tim was also very accommodating with meeting times..."
  • " I recently was in need of Mr. Sierra's services and I found him to be very understanding and helpful in my particular circumstance. He met with me and explained everything in full detail and also answered every question that I had....."
  • " I recommend Timothy Sierra a loyal and dependable lawyer. When you talk to him you feel that you are with a friend or a member of your family. Timothy is able to lead you in every step of the process. Good job Timothy."
  • " Bankruptcy is a private and personally devastating life event. Timothy Sierra and his assistant, Nancy, made the process as painless as possible. They kept in close contact via phone and email so I always knew what was happening in my case...."
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