Debt settlement or filing bankruptcy which one is better to choose?

• Ask the credit card companies to provide a credit report to you.
• Review the statement provided by the credit card companies. If you find any discrepancies on the report then inform the credit card company.
• Maintain a record of the FICO score (Fair Isaac Credit Organization). The average FICO score should be near to 500.
• Calculate the outstanding amounts that you owe for instance credit card bills, loans as well as the collection account.

• Can you pay off your debt with your present income? If you think of a debt settlement program then make sure that your income is more than your expenses. Look for other alternatives if your expenses exceed your income. You can enroll with a debt settlement program only if your monthly income is more than your expenses. Then this program would help you to come out from the debt trap.
• Add the amount of debt you owe and verify whether you are eligible to enroll with a debt settlement program or not. As each debt settlement company has a different credit card balance requirement to settle your debt therefore choose the company as per the balance you owe.
• Look for a reliable debt settlement company. The companies that charge a huge up front fee should be avoided. While choosing a debt settlement company verify whether the company is accredited with the Better Business Bureau. Make sure the fees that they charge does not burn a hole in your pocket.
• You too need to be aware of the negative impact of a debt settlement company like creditor calls, damaged credit record and tax problems.

• If you have any other possibility to come out from the financial doldrums then you must avoid filing bankruptcy. Look for alternatives other than bankruptcy and online search would fetch you a good result for instance debt settlement programs, debt management programs etc.
• You need to know whether you qualify for filing bankruptcy or not. Online search would help you to know about the bankruptcy code and the books that are available would help to clear your concept on bankruptcy procedure. A bankruptcy attorney would help you to guide through this process. Only an attorney can say whether you qualify filing for bankruptcy or not.
• There are innumerable Chapters under bankruptcy. Read through the clauses of the chapters so that you can understand under which the chapter you can qualify for.
• Bankruptcy would remain on your credit report for an extended period of time. You need to be aware that filing bankruptcy can ruin your credit report. As you should always keep bankruptcy as your last resort if you have other options to fight your debt. So get prepared that you would hamper your credit score if you file bankruptcy.