Most people are familiar with the implications of filing for bankruptcy. However, “debt settlement” is a helpful but lesser known option. It’s important that you understand all of your options if you’re having difficulty paying off what you owe to your creditors. Bankruptcy and debt settlement are both solutions that you should explore with an attorney.
Bankruptcy and Debt Settlement at a Glance
Bankruptcy falls under two categories: chapter 7 and chapter 13
Chapter 7: when you file for chapter 7, debt (such as credit card bills, medical bills, and loans) is wiped out regardless of how much you owe. Of course, this will adversely impact your credit rating. You may also have to give up a portion of your assets as a trade-off. Chapter 7 is normally settled within six to nine months.
Chapter 13: With chapter 13, you agree to pay back a portion or all of your debts. The upside, though, is that you retain your assets. Chapter 13 does take longer to resolve, usually lasting three to five years.
The third option is the dark horse alternative very few people know about: “debt settlement.” When settling a debt, you’re essentially asking the creditors to accept less than what’s originally owed to them. The amount varies and is generally between 35% and 75% of the total balance.
Debt settlement can be a private affair between you and the creditor. However, we recommend that you bring in an attorney to negotiate on your behalf. Like bankruptcy, debt settlement can also adversely affect your credit score.
Let Us Help Resolve Your Debt
Contact Curtis & Casteel Law Group for legal advice on debt resolution. Our firm works extensively in the fields of bankruptcy and real estate planning. Whether it’s bankruptcy or debt settlement, we will recommend the most viable solution to put you on the path to financial recovery.
Edited by Justin Vorhees
Complete Debt Resolution Management
Proudly serving the people of south Snohomish County, north King County, and the Greater Seattle area
