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In fact, debt settlement isn't really an alternate for bankruptcy as bankruptcy is the worst case scenario. Filing for bankruptcy when you the option not to, should not even cross your mind because once you do, there really is not going back. Bankruptcy spells permanent damage for your financial future. Not only is it a very public process that could be embarrassing, it also goes on your permanent public record, free to be looked into by basically anyone. This is nothing compared to the actual damage it causes. Bankruptcy takes your credit standing down to a zero. Most banks have policies that do not allow lending loans to bankrupts from 10 years minimum to even a full lifetime ban. Once you go on record as having been bankrupt, you are also usually no longer allowed government and federal financial assistance in the future.

Another factor about bankruptcy, probably what hits people the worst, is losing their hard earned assets that are taken to pay off your debts. People work all their lives to obtain their resources and bankruptcy can take away everything that isn't protected by limited liability. Why would one voluntarily go down this tedious route when, as I already mentioned, there are other alternatives that are nowhere near as taxing or damaging!

Debt settlement is by far your best option, particularly if your debts are about to reach or have exceeded the $10,000 mark. It is an easy and basically stress free process. The only thing to remember is that you must have access to some funds or an income coming in. I will explain why this is necessary.

The first step is to track down a legitimate and reliable debt management company. The best way to do this and avoid being scammed is to do your research through the free debt networks online. Most have a listing of popular, legal debt settlement firms as well as a listing of what services they provide and updated contact information. Once you have made your decision, approach the firm with your case. They will then investigate your financial issues and proceed to negotiate with your creditors on a reduction in your debt sum. You can get up to a 60% decrease in your debt! This is why a source of finance is necessary, as usually the final decided amount needs to be paid in full, usually also on a newer decided date.

Debt settlement is a simple and legal solution to your debt problems. Though it does affect your credit rating, the damage can be overcome within months, whereas I already mentioned that bankruptcy can leave permanent damage to your financial future.