Debt Settlement vs. Bankruptcy
Examining your options is important for anyone experiencing debt problems. If you are considering bankruptcy or debt settlement to resolve your financial difficulties, investigate the consequences of each process before making your decision. Below is some information about debt settlement companies and bankruptcy that you may not know: Free Consultation
Debt Settlement: The debt settlement process will harm your credit for years. Creditors will report your delinquent account until it is paid. Your report may identify settled accounts as paid less than 100%, which also adversely affects your credit score.
Bankruptcy: Any debt included in a bankruptcy appears on your credit report as discharged with a zero balance from the date you filed your bankruptcy case. Bankruptcy stops adverse reporting so your credit report can improve. Free Consultation
Debt Settlement: The typical debt settlement account will resolve your debt with a lump sum payment of between 20% and 80% of the debt.
Bankruptcy: In most bankruptcy cases you pay nothing to unsecured creditors.
Debt Settlement: Any settled debt will have tax consequences and you may have to pay the IRS.
Bankruptcy: There is no tax liability for a debt discharged in bankruptcy.
Debt Settlement: You may be sued while you or your representative is attempting to settle your debt.
Bankruptcy: All lawsuits are prohibited during your bankruptcy case.
Debt Settlement: Some debt settlement companies are disreputable and the process is even illegal in some states.
Bankruptcy: The bankruptcy process is authorized by the United States Constitution and its laws are written by Congress. Only licensed attorneys admitted to practice in the federal courts are able to represent bankruptcy debtors.
Debt Settlement: The debt settlement process can take more than a year. The general rule is: the longer you don’t pay, the better the settlement. Creditors are reluctant to accept less than full payment unless they believe that you may file bankruptcy. Free Consultation
Bankruptcy: The typical chapter 7 bankruptcy case takes less than six months.
If you are struggling with debt, investigate your options and speak with an experienced bankruptcy attorney. The federal bankruptcy law is a powerful tool to eliminate your debt problem and put you on the road to financial recovery.