I just read an article on MSN Money about debt settlement. Surpringly, Unlike in most mainstream news articles, debt settlement was not "bashed" as a horrible option for consumers with debt: When debt settlement makes sense

But once sentence caught my attention. The writer Liz Pulliam Weston stated that "Bankruptcy is cheaper; debt settlement is faster".

So I started thinking:

- Is this true?
- And why is debt settlement often seen as an inferior option to bankruptcy?

It's hard for me to answer the first question, since I don't know much about bankruptcy. But I've never though of bankruptcy as the "cheap" option for getting out of debt. And even if it is, I think most people think of bankruptcy as the "final" option. Only to be used if all other options fail. And one with a very serious stigma (something like "Hey, you filed for bankruptcy? Loser!") So it may cost less in terms of money, but it still carries with it the feeling that it is the last resort.

The second question is much easier to answer. To file bankruptcy, you must meet with an attorney. And attorneys (depsite all the lawyer jokes you've heard) are respected. On the other hand, debt settlement can be handled by an attorney, but it is not a requirement. And with all the horror stories you hear about debt settlement, the press - even "expert" financial writers - jump to the conclusion that debt settlement is EVIL. Even though it is certainly not (it's just that since so many people who choose to hire a settlement company DON'T know what they are getting into and are NOT properly educated by the company! So when the process gets a little stressful - which is normal - the people panic and say they were ripped off. Maybe they were. OR maybe they were not and just didn't know how the process worked.)

Bottom line - if you're so deep in debt that you're even reading this, then check out both. Do your research. Ask lots of questions. Compare costs. And then decide whether you want to save money - or save time!

What do you think?