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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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  • "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. "
  • "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. "
  • "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. "
  • "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. "
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