I have seen a number of people talking about their low lopsided incomes with a contrast of far growing debts, thus confused about what option to take and when to consider debt settlement.
One thing is certain that if you are escalating your debts with a considered low level of income it is out of question that consolidation will ever going to work for you because of the known fact that in consolidation you have to combine all your debts as one and have to pay a reduced amount against that, where you are not in the position to payback the amount.
Neither the bankruptcy will be a good option for you as it affects your credit score and if you are having a secured debt your creditor can go court to claim a sell on your pledged possessions to get back to his payment.
Got unsecured debts like credit cards, store cards, shopping cards, medical bills or others it is when to consider debt settlement because in this case the creditor does not have any type of security and thus unable to sell and repossess his amount and as he has no choice but to go as you decide as per terms and conditions because if you go bankrupt the only hope of getting his amount back will be drowned and he will completely lose his amount.
But if you want a settlement and decide to go for a reduced amount to be paid in future installments the scenario is very appreciable for a creditor as well as for you that at least you are not affecting your credit score which is in the case of bankruptcy you surely will.
When to consider debt settlement, it is important to know that it is not a process which is going to be settled in few months.
It will take years and if you chose a company for doing it you have to pay a continued fee to them.
Although it takes just a basic understanding of your credentials and the process itself to execute, which you can surely do by yourself with a help of a consulting firm or your personal lawyer.