Legal Options For Debt Relief In 2010 - Bankruptcy Vs. Debt Settlement

Online, June 1, 2010 (Newswire.com) - A big debate that has come up recently is that of legal options for debt relief in 2010. At the top of the debate is that of bankruptcy vs. debt settlement. Both options can been very effective but each comes with pros and cons. Consumers who are massively in debt need to fully outweigh each debt relief option to determine which is most appropriate.

Starting out looking into bankruptcy. The main types of personal bankruptcy are Chapter 7 and Chapter 13. Chapter 7 will sell your assets and wipe away your debts. This method will give the consumer a fresh start but is nearly impossible to get after the strict regulations that came out when the new bankruptcy laws were passed in 2005.

Chapter 13 bankruptcy is where the consumer would pay back about 30-60% of the debt back but averages only a 32% completion rate. Bankruptcy typically can cost up to $2500 to file, have a negative impact on the consumers credit for 7-10 years, and depending on the consumers industry can be very harmful on their employment. The hardest part about bankruptcy is the negative stigma and mental stress that comes with the bankruptcy process. It is best used as a last resort of the legal options for debt relief in 2010 .

One of the most popular legal options for debt relief in 2010 is that of debt settlement. Debt Settlement is the process of negotiating the balances of a consumers unsecured debt in order to reduce the debt to a significant savings. The process is a 1-4 year program to achieve financial independence. For someone that is in a financial hardship this is a legitimate option to avoid all of the heartaches that are associated with bankruptcy. This will have a negative impact on your credit for the duration of the program. The good thing is do to the short length of the program the consumers debt to income ratio is greatly improved and they can immediately begin to repair their credit score.

Bankruptcy and debt settlement are two good legal options for debt relief in 2010. Debt settlement should first be looked into when making a decision to get out of unsecured debt. If the consumer is in a position where they will not qualify for a debt settlement program then bankruptcy may be the last option.

For a free debt relief consultation to determine what debt relief option might be the most appropriate check out the following link:

Free Debt Reduction Help