debt settlement vs bankruptcy

debt settlement vs bankruptcy

Chicago Law: Debt-settlement firm to wind down business –

For many people, the idea of filing a bankruptcy is a tough emotional decision often filled with feelings of shame, embarrassment and a feeling of failure.  Unfortunately, even the best bankruptcy cannot deny that these are commonplace emotions when first meeting with a bankruptcy client.  Debt Settlement outside of bankruptcy oftentimes prays on these people by promising to fix a debtors debts without the stigma of a bankruptcy and by doing “something good” by paying back a portion of the debts to the creditors.

Wake Up!  The 2005 Bankruptcy Act that encouraged the use of debt counseling and debt settlement alternatives to the traditional filing of a bankruptcy has been a boondoggle and is very unhelpful for most debtors.  There is a reason that bankruptcy filings exists – it is a court managed and monitored discharge or repayment of debt that is managed and regulated by the United States.  For most debtors, a Chapter 13 Bankruptcy is a cheap upfront cost way to get immediate debt relief and also pay back creditors as much as they are able.  Not only are legal fees capped at $3500 in the Northern District of Illinois, but all interest charges, late fees and collection efforts stop the day of filing.  With non-bankruptcy debt settlement you are stuck with a “promise” to get creditors to stop collection efforts – why would they?  The first creditor to seize assets is the victor


Bottom line, Chapter 13 Bankruptcy is a great debt relief choice when the debtor has little up front money to start his or her bankruptcy and needs immediate debt relief through the automatic stay which stops all collection efforts including citations, garnishments, lawsuits and harassing phone calls.  For debtors who have the upfront funds to file a Chapter 7 Bankruptcy – this is great for those who don’t need to get caught up on car payments or house payments.  Often referred to as a “straight” bankruptcy – this is the traditional filing choice for those who really just need to walk away from all of their non-exempt assets and have no income to pay back creditors.



We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. CALL 877-GO-GO-NLO (877-464-6656) FOR A FREE BANKRUPTCY CONSULTATION TODAY! SATURDAY APPOINTMENTS ARE AVAILABLE.