My boyfriend is in debt what is his best option debt settlement or declare bankruptcy?

There is no simple answer. Both techniques have pros and cons. Before going into them, it is worth noting that bankruptcy is a more “global” procedure—it affects all outstanding debts. Debt settlement needs to be negotiated with each creditor separately. If your boyfriend owes money to many different creditors, debt settlement would be very hard to do; it works best when there is one or a small number of creditors.

Apart from the above:

Bankruptcy pros:

• Stops lawsuits, garnishments, and collections
• Some property is protected in bankruptcy
• Doesn’t require creditors to agree to it
• Discharges all debts

Bankruptcy cons:

• Stays on your credit record for 10 years; very significant impact to credit score
• After filing bankruptcy, there’s a minimum wait before you can file it again, so once you use it, it is unavailable for several years
• If you file Chapter 7 bankruptcy, most of your assets will be liquidated or sold for creditors
• If you file Chapter 13, you will have to live by a court-ordered budget for up to 5 years

Debt settlement pros:

• Actually reduces what you owe—saves you money
• Only affects the debts and creditors you have negotiated with, so it may not impact other credit or commercial relationships
• Will typically stay on your credit report (as not paying a debt in full) for 7 years, which is less than bankruptcy
• Less impact to credit score than bankruptcy

Debt settlement cons:

• Voluntary on the part of creditors—they don’t have to agree
• Does not stop lawsuits or collections efforts (at least not until and unless some successful outcome is negotiated)

A good strategy is sometimes to pursue debt settlement first, then, if it doesn’t work out, to look to bankruptcy as an alternative. An attorney who is experienced in helping people in financial distress can help your boyfriend decide on a strategy and then help him carry it out. Good luck.