Debt Settlement Vs Bankruptcy
You may find yourself among thousands of Florida residents who are struggling with overwhelming debt and poor credit. You may be able to get debt relief depending on your financial situation. What is the difference between debt settlement vs bankruptcy? Which one is right for you? The U.S. Courts define bankruptcy as a legal process to repay debts or erase them.
What Is Chapter 7 Bankruptcy And Chapter 13 Bankruptcy?
Both chapters 7 and 13 can be used to discharge the personal debt. However, they work in a different way. Chapter 7, also known as “fresh start”, bankruptcy allows you to liquidate your non-exempt assets in order to repay creditors. The majority of debt remaining gets discharged. This process can take up to six months.
Chapter 13, also known as the “wage earners bankruptcy”, allows you to repay your debts using a three-to-five-year payment plan. A budget is created that allows you to pay a monthly payment and a court-appointed trustee negotiates for your creditors. The court will discharge most of your unsecured debt after you have made the final payment.
What Is Debt Settlement?
A debt settlement agreement, which is not bankruptcy, allows you to pay a portion of your outstanding balance, and then the creditor will forgive the rest. Many people use a debt settlement firm to help them stop paying their creditors and give them the money.
The company keeps the funds in an account till it reaches a certain amount. After that, it contacts creditors to negotiate the settlement. There is no guarantee that the creditor will accept a settlement and may even take legal action. This could lead to more financial problems.
Each option has its pros and cons. You can make an informed financial decision to relieve your debt.
Our firm understands that gambling with a farming or fishing operation that has been in the family for many years is not something to take lightly. Bruner Wright has more than 30 years of experience handling bankruptcy cases. We have helped clients with all types of financial situations, jobs, and all kinds of operations. We understand that each client is unique and has its own backstory. You are not just another piece of paperwork to us. Our firm believes that once you have hired a law office to assist with your bankruptcy, they should be available to answer your questions and resolve your concerns. Unresponsive attorneys are useless in representing your interests. Bruner Wright takes great pride in being open and transparent with our clients. Every case is treated as if it were our own family.
Now that you know the difference between debt settlement vs bankruptcy, call us today to schedule a complimentary consultation with a bankruptcy lawyer in Tallahassee. We would love to learn more about your situation and help you plan. Do not let an unqualified law firm handle your finances. Get in touch with us today!