Should You Agree to a Debt Settlement?

June 15, 2013

Before you agree to a debt settlement, you may want to consider speaking to the dedicated, experienced bankruptcy professionals at Fears Nachawati. For some people who are struggling to make their monthly payments, a debt settlement may be just what they need. For others, however, a Chapter 7 or Chapter 13 may be a faster, cleaner, simpler and more final approach to escaping their indebtedness.

Typically, a debt settlement occurs between a creditor and a debtor. By modifying the debt structure in the way a creditor may want – such as extending the payment period, posting additional collateral or agreeing to modified terms and conditions – then a debtor often receives in exchange benefits which they want, such as lower monthly payments. In some cases, such as when the debtor is just missing payments by a few dollars or a few days, a debt settlement may make sense.

In other situations, however, such as when the debtor is regularly missing payments or paying considerably less than what is owed each month, a debt settlement may simply prolong an inevitable bankruptcy and, in the process, do more harm than good. Unlike a private settlement, a bankruptcy occurs under the watchful eye of a third party – namely, the federal government – which generally makes sure that consumer debtors play on a level playing field with sophisticated creditors.

So, what’s the right move right now: a debt settlement or a personal bankruptcy? The first step is to talk to the experienced and dedicated bankruptcy professionals at Fears Nachawati. Our team of attorneys and advisors can outline your options and provide you with the roadmap you need to move forward successfully. Contact us today for your free consultation.

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