Debt settlement is a potentially much more damaging undertaking that individuals should
be wary of and consider very carefully before entering into. Debt settlement
is a process where a company – typically not a lawyer – actually
recommends that you STOP paying all your payments on your credit cards.
The money that you "save" by not paying your credit cards is
then placed and accumulated in an account. Once you have accumulated enough
money, the debt settlement company then contacts your creditors and attempts
to "settle" your debts by paying the credit card company a lump
sum payment to satisfy the total amount due.
Details of Debt Settlement
Typically, you must have approximately 50% of the amount owed for a credit
card company to even consider accepting the lump sum payment in full satisfaction
of the account / debt.
Obviously, your success of becoming debt-free will greatly depend on:
- How much total debt you have
- How well your debt settlement company negotiates
Lastly, and what they typically do not tell you, the debt settlement company
charges a hefty fee! Out of the money that you have "saved"
to settle your debts will FIRST come your debt settlements company's
fee – they will take it out before they use your money to settle
your accounts. This is just another hurdle that you must overcome before
you can become debt free.
Chapter 13: A Predictable Option
Chapter 13 Bankruptcy, on the other hand, is definitely a blemish on your credit score. Chapter
13, however, is many times a better, more predictable, results-oriented,
certain, cost efficient way to put a strangle-hold on all of your creditors
and use your money and disposable income to pay as little of your unsecured
debt back as possible, interest free, over a three to five year period of time.
In sum, live reasonably, pay your disposable (i.e., left over) income to
a Chapter 13 Trustee to a three to five year period of time and at the
end, any balances left unpaid, along with any collection fees, late fees,
penalties, interest, fines, etc., are ALL discharged. The debts are gone
forever never to be collected again!
Trust a St. Petersburg Bankruptcy Attorney from LeavenLaw!
Make sure you know ALL the facts before making your decision. Bankruptcy
is NOT a dirty word! In fact, many times it can provide the relief needed
to move on with your life.
Call us today to schedule a free initial consultation.