Debt Settlement or Bankruptcy Which is Better

Chicago bankruptcy lawyer are frequently asked whether it makes sense to try to settle debts out of bankruptcy. Debt settlement firms claim that they can settle credit card debts for pennies on a dollar. Is there truth to this? Mostly no. Credit card companies are not fools. If you are going to file for bankruptcy and pay them nothing, they would be happy if you pay them something. However, they are not going to make this easy for you. Unless it's totally obvious to the credit card companies that you can't pay anything, they won't accept a discount on their claims. And they want cash, all in one lump sum. Unless you get an inheritance or have a rich uncle or rich boyfriend or girlfriend, you won't have enough money to pay what the credit card companies want.

So the debt settlement firms will ask you to pay them a sum of money every month. They will take their fee off the top. And then, they will offer to pay dribs and drabs to the creditors. The problem with this strategy is that interest continues to accrue at a high rate. Moreover, nothing stops the credit card company from suing you, getting a judgment and garnishing your wages. So you pay the debt settlement firm and end up in bankruptcy anyway. This is the worst of all worlds. That's why both the Federal Trade Commission and the Illinois Attorney General's office says that most debt settlement programs are scams. A competent Chicago bankruptcy lawyer will advise you about debt settlement plans so that you can make an informed decision.


However the best -debt settlement plan- is either chapter 7 where you'll pay nothing or chapter 13 where you'll only pay your disposable income for no more than 5 years whether you pay your debts off in full or not. You won't have to pay any interest in most cases. And you can't be sued as long as you are making regular payments under your plan.


Unfortunately, most of the debt settlement plans spend a fortune on radio and television ads to make you think that there are special government programs requiring banks to accept pennies on a dollar in settlement of debts. This is false. They want you to think that it is foolish to file bankruptcy. That's false too. Don't take my word for it. Before you decide, confer with a reputable credit counselor - designated in your area by the United States Trustee - to see whether bankruptcy is right for you. Credit counseling before bankruptcy is cheap and easy - never more than $50 and often less. It is mandatory if you are going to file a bankruptcy.


Make your decisions wisely with the help of a competent, experienced, capable, highly rated Chicago bankruptcy attorney with offices in Chicago, Skokie, Waukegan, Kenosha and Milwaukee. somekeyword is best firm of somekeyword and Attorney in chicago, which work for debt settlement or debt relief. Call 866.525.3529 for a free consultation with a somekeyword at Lakelaw - Loop Bankruptcy in Chicago, Illinois.

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