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Bankruptcy could help you with debt settlements

| Mar 1, 2021 | Chapter 7

If you are struggling in debt, one thing you may have seen is that you could find some debt relief with settlement offers. These allow you to offer a portion of the debt you owe to your creditors. A creditor can decide if they will take that offer to close your debt.

These settlements usually get reported to the credit bureaus, but it isn’t as harmful as some alternatives, such as simply failing to pay or going into bankruptcy. However, if you have more than just a single debt to settle, the damage could add up quickly.

Is it worth settling each debt individually, or should you consider bankruptcy?

If you have only one or two debts that you need to settle and you have a larger amount of money to offer to the creditors, then you may want to settle them individually. Your credit will be impacted, but that impact won’t affect your credit as long as a bankruptcy would.

On the other hand, if you have overwhelming debts from various sources, then it may be a better idea to look in to bankruptcy. Both Chapter 7 and Chapter 13 bankruptcy allow you to settle debts. Chapter 7 requires the liquidation of some assets to pay what you owe. Chapter 13 Bankruptcy is more like a long-term payment plan with a low monthly payment and an overall reduction in your debt.

Any of these options have the potential to help you get your finances back on track. Our website has more information on bankruptcy, debt relief services and what to expect as you work on your financial security.