Most American borrowers are considering debt settlement plans as a method of getting rid of unsecured debt.
In the past most people were not aware of the settlement option.
When a borrower got in to massive credit card debt the only relief he could see was filing bankruptcy.
They thought that it was the only alternative they have.
But nowadays people are well aware of the debt settlement process and tend to choose that path instead of filing bankruptcy.
One may see that filing bankruptcy is the easiest and quickest way to get rid of massive credit card debt.
But that is only the bright side of bankruptcy.
Have you ever thought of the negative side of it? Though filing bankruptcy is a legally accepted method of eliminating debt, it creates bad effects for both borrower and lender.
Once you file bankruptcy, all the lending firms will keep eye on you and will not allow you to take any loan for about ten years.
The society considers bankruptcy as an unethical act to do.
Therefore if you file bankruptcy it will be a great harm to your reputation and goodwill.
On the other hand the lender will have to suffer huge losses as a result of this.
Therefore it is clear that filing bankruptcy should be your last option for eliminating credit debt.
The borrowers should try to avoid their overwhelming debts by a process of settlement.
If your bank balance shows that you owe more than $10000 to your lender, debt settlement should be considered as a last resort before filing bankruptcy.
A borrower can eliminate about 50% of the total payable balance through this method.
As this process is done though a private negotiation, this will be kept secret to the public.
Therefore it will not harm the borrower's goodwill.
And it gives a chance to the lender to recover some of the money.
Therefore debt settlement plan is a good option a borrower should consider as a last resort before filing bankruptcy.