Which Is Best - Filing Bankruptcy Or Debt Settlement?

You can't ride in your car and listen to the radio without hearing commercials for debt settlement. Most of these companies try to sell the idea that debt settlement is better than bankruptcy. Many of their claims state that settlement of your debt won't damage your credit as a bankruptcy filing will. Individuals that are already suffering from severe financial trouble should be very wary of companies that make unreal promises. After searching blogs on the Internet there seems to be a very negative stigma about debt settlement companies. It seems many people have not gotten what they believed they were promised.

Bankruptcy Attorney San Antonio, Alternatives To Bankruptcy, Can I File Bankruptcy,

Debt settlement companies claim that they are an alternative to filing bankruptcy, and offer the same results. After doing a little bit of investigation, there have been many complaints against these debt settlement companies. One complaint stated that the client had contracted with a settlement company to eliminate all their credit card debt. The individual said that they paid for the company a few thousand dollars up front to get started negotiating with their creditors. After signing up the individual was served with papers to be sued by one of their creditors. The individual contacted the debt settlement company and was told that they would take care of it and not to worry. A month later, the debtor found out that the creditor got a judgment against him and was now garnishing his wages. After this happened, the debt settlement company would not return his calls as they could do nothing about it.

After speaking with a bankruptcy attorney, it seems that this is more common than most people know. For this situation there is no comparison between bankruptcy and debt settlement. First of all, the money the client gave to the debt settlement company would have easily paid for a bankruptcy attorney and the filing fees. Secondly, filing bankruptcy will start the automatic stay which will stop all collection proceedings against the debtor. So, in the case above, the creditor wouldn't have been able to get a judgment against the debtor. Lastly, even if the lawsuit had been filed against the debtor before the bankruptcy was filed, bankruptcy would stop the wage garnishment and any other collection attempts by the creditor.

When it comes to eliminating debt filing bankruptcy is king. There is a bankruptcy chapter to suit every debtor's needs depending on their personal situation. Chapter 7 bankruptcy is the best for a debtor that qualifies for the means test and has a large amount of unsecured debt. Chapter 13 bankruptcy is beneficial for the individual that wants to stop foreclosure on their family home. Chapter 13 will allow the debtor to negotiate the back payments and keep their home. When deciding to file bankruptcy that trip to a local bankruptcy attorney would be a good start. Getting a consultation and reviewing your personal situation can be very enlightening. Don't sign up for anything until you've reviewed all your options.

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