In my opinion, this is no comparison at all. Bankruptcy should be compared with death. Just as you would not want to die, in the same way, you should never voluntarily opt for bankruptcy. Agreed that there may be some instances where bankruptcy may seem like the only option available. When you have hundreds and thousands of dollars of debt on your head and when you lose your job or when a productive member of your family expires, then you may have no option but to opt for bankruptcy.
Personal bankruptcies are fraught with negative social and economic consequences. Your child may have been a small boy or girl when you declare bankruptcy. However, you will find it difficult to get affordable college loan because of your bankruptcy. The long term consequence of this decision can be understood only by talking to those who have opted for this decision in the past and are regretting the same.
Today, debt reduction has become so popular and so common that it has become more of a precursor for bankruptcy. That is to say, you should think of bankruptcy only when all your debt reduction tactics and methods have failed. Reduction of debt is something that takes place automatically when you have repaid the money owed to the lender.
However, if you do not have money, then you should get in touch with your lender and come to an arrangement. The arrangement may range from conversion of the unsecured debt into a secured debt to an absolute and unilateral waiver of sixty to seventy percent without any payment from your side.
There are many arguments for and against bankruptcy as compared to debt reduction. However, the primary argument that should always clinch the case in favor of debt reduction is that it offers scope to get your finances back on track.
In case of bankruptcy, the law enters the picture and you will find it difficult to get affordable loans even if you become a rich person very quickly. Debt reduction may be bad but it is never as bad as bankruptcy.
In any case, Chapter 7 bankruptcy cannot be filed unless you opt for compulsory credit counseling. Chapter 13 bankruptcy is nothing more than a glorified debt management program offered by the government. Since bankruptcy is not the fantastic option to escape all your debts as it once was, you might as well check out debt reduction before you try your hand at other options.
If you are over $10k in unsecured debt it would be financially prudent for you to consider a debt settlement. There are organizations that exist called “Free Debt Relief Networks” that are a great place to start in locating legitimate debt settlement companies in your region. The