We are living in very unstable times, financially and many people have been forced to deal with some unpleasant circumstances in their lives. Debt reduction vs bankruptcy is a decision that individuals are being faced with and the choice is not an easy one.

The choice will be easy in some cases. You may have only one option that will suit you finances at the current time. However, if you start evaluating you options at the first sign of financial duress, you are going to have more choices.

If credit counseling is an option for you, it is going to be a better option than bankruptcy. I make this statement because of the negative effect it will have on your credit. A bankruptcy can remain on your credit report for up to 10 years. There are a number of financial experts that have filled bankruptcy and are now millionaires. They will tell you that the fact that they filed bankruptcy has haunted them for a long time.

Debt negotiation is another alternative for getting out of debt. This is not an ideal alternative either. If you can settle quickly and the debt is old, debt negotiation can work for you. People may be easily lured by how quickly debt negotiation companies say their clients can have their debts eliminated. I am not saying they are not being truthful. But if go from making on time payments or close to it, to not making payments at all so that you can build escrow with a debt settlement company, you are probably asking for trouble.

If you are wondering can you be sued for credit card debts, the answer is yes. Both bankruptcy and debt settlement is going to ruin your credit. The big difference is your lenders cannot take legal action if you have filed bankruptcy. If you read the forums, you are finding more people that have been sued by their lenders while they were going through the debt settlement process. Debt reduction vs bankruptcy is a tough question. Keep in mind, every financial situation is unique. Just like an illness, early detection affords you the most options for treatment and recovery.