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Debt settlement or bankruptcy – which one truly makes sense in 2025? Many people facing overwhelming debt feel trapped between these two choices, but the real differences go far beyond what most videos share. This updated guide from Ascend Finance dives into the hidden credit score impacts, the risks no one warns you about, and how the wrong choice can delay your financial recovery for years.
You’ll see why some people’s credit scores barely move while others face lasting setbacks. This video uncovers how debt settlement actually works behind the scenes, including the realities of falling behind on payments, potential lawsuits, and what those “no upfront fee” companies don’t explain. It also touches on Chapter 7 vs. Chapter 13 bankruptcy and the surprising scenarios where one option might quietly outshine the other.
If you’ve been wondering whether to negotiate with creditors or start fresh through bankruptcy, this breakdown will make you think twice before committing. The differences in 2025 are more significant than ever – and the path you choose could change your financial future.
Here’s what we cover in today’s video:
0:00 Debt Settlement vs Bankruptcy
0:30 Credit Score Impact Explained
2:45 When Debt Settlement Makes Sense
5:24 How Debt Settlement ACTUALLY Works
7:20 Risks and Lawsuit Potential
8:45 Debt Settlement Company Fees
10:15 Chapter 7 vs Chapter 13 Basics
12:40 Which Option May Be Better for You
At Ascend, we are dedicated to making debt freedom cheaper, easier, and faster.
Music: bensound.com
License code: 0PQPYEPTYPS5ODIQ
Thanks for watching! As I mentioned, feel free to take our Free Debt Options Calculator: https://tryascend.com/qualify/calculator/quick/ytdsbk24
Are small business owners eligible for Chapter 7 if they are the sole employee? Your debt tool doesn't say whether it is an asset. It's literally how our family is supported. Thanks!
I want to start my life over after bankruptcy and a name change. Will this be possible?
…great information shared here
Bankruptcy you likely to get back into debt and even more severely trust me !!
Is a consolidation loan or special purpose account immune to bankruptcy
Im being sued. Filing emergency bankruptcy 7
Monday. I have 0 assets. Smh.
I suddenly lost my husband in January and now I’m left with all the debt on my one income and I can’t keep up. Gratefully, I’m not behind yet, but I’m eventually going to fall behind and it’s stressing me out. I was told chapter 7 was the best option but…I really don’t know. Can’t wait to hear from you guys to discuss what I can do. Thanks for your help!
I 'm working with big debit consoldation comapny but they charge 18% of the whole total debit and not 18% from the settled amount, what do you thimk and where can I find ther egulations of debit consolidation companies.
a chapter 7 sounds cheaper!!!
With debt settlement don’t you have to pay taxes on the forgiven amount?
I work in debt settlement, I also have gone through the process, Everything you say is true, a big reason why I did it is cause I knew my biggest creditors would be fast to negotiate.
Filed Chapter 7 Bankruptcy on January 30th to stop my paychecks from being garnished. Got my official discharge on April 29th and my credit score went up 60 points. I just got approved for 3 credit cards so now I am going to rebuild credit responsibility…. BANKRUPTCY SAVED MY LIFE! I encourage people who have exhausted every way possible to pay back debt
Show me how to go bankrupt multiple times and still be a billionaire like our piece of shit president!
Great material. Are you taking calls still?
Always 99.9% better to file bankruptcy, debt settlement often wrecks your credit for a much longer period of time, and as you mentioned in the video it doesn’t protect you from being sued or wage garnished like bankruptcy does. A chapter 7 will $0 out and close all of your debt (besides student loans, child support, and a few other exceptions) you’re also protected by the law from creditors. My sore jumped 200pts the day after I filed chapter 7, and score continues to climb as I’ve rebuilt.
How does bankruptcy affect individuals with secret clearance?
Great info????
Bankruptcy better
I took debt settlement before and it will not releive of any debt plus your score will be so bad for years. The company that is managing your debt is taking a huge chunk of your monthly payment as fees from time to time, you will end up paying more than what you actually owe in the end.
For years, I felt trapped by debt, constantly juggling bills and never managing to save enough to make investing worth it. I know a lot of people have been in the same boat feeling like they’re just one step away from drowning. After a while, I finally hit a point where I had to reassess everything. I dove deep into learning about finance, and it wasn’t easy, but finding strategies that matched my specific situation really made the difference. It took time, but the changes were real. Now, I’m debt-free and close to retirement, with a $3 million goal in sight. It still amazes me that I’ve gotten so into watching financial content something I used to avoid like the plague
I’ve been reading reviews of companies taking the payments but not paying the payments out to creditors.
What about settling debts with creditors yourself?
With debt settlement, do you have to include all debt like the process of bankruptcy? Current credit cards & old debt. If i wanted to keep 2 credit cards because the limits are high & payment history is perfect.
Thank you so much for sharing you knowledge & wisdom. I've pick up some great info. I'm so glad I found your channel. I might have to file ch.7 of for the 1st time in my life. Go figure I'm bad with money and moving from mid-west to now living in S. Cali. puts me into this mess. But I created this mess now I have to clean it up. Again thank you sir for this great info. I subscribe and liked..God bless you.
I got some credit cards Capital One and got behind I got Crossroads that freedom
Debt Calculator asks for email and phone number btw, unlike he said in this vid.
I with ascend. Hope with time my credit score goes up. Hope to retire by 2026