Due to the condition of financial instability in the country, many people are suffering from the pain of credit card debts. People used credit cards when the country was going in fiscally stable position but soon after the wave of recession entered the economy, people lost their jobs and those fortunate people who were still on their jobs faced the problem of decline in the wage rates. Due to these conditions, people get unable to payback their credit card debt on regular basis. The economic conditions also reached to the worst side as with each passing day, more and more people are falling into the pool of massive liabilities.
In order to take out people from this depressed situation, the government has established the concept of bankruptcy and debt settlement in the market. These both methods for credit card debt relief are legal and work under the full supervision of the federal administration. In this article, a person will learn the pros and cons of each method so that it will become easy for him to make selection between these both options.
There is no doubt that The process of bankruptcy brings fast reduction in the amount of credit card debt but it destroys the credit ranking very badly due to which the particular person becomes ineligible to take loans and advances from banks for the next several years. The process of debt settlement also brings fast reduction in the amount of debts.
Though credit ranking also gets affected but this impact is for short period of time and once a person pays back his liabilities, he can avail the facilities offered by banks easily. Filing bankruptcy is expensive as a person has to pass many legal formalities and other paper work. On the other hand the process of debt settlement is not expensive as a person does not have to pass many legal obligations. In case of bankruptcy, all the personal assets get in danger but no such fear is present in the method of debt settlement.