Debt Settlement Vs. Bankruptcy

Get Real Debt Relief, Not Promises

Turn on late night TV or listen to talk radio, and you will hear numerous advertisements for debt settlement companies. These firms promise debt relief without the need to file bankruptcy. But you should be wary of signing up with a debt settlement or debt consolidation company. By doing so, you could make debt payments to the company for years, only to end up facing foreclosure or a collection judgment.

The Dangers Of Working With A Debt Settlement Company

When you sign up with a debt settlement or debt consolidation company, you agree to make monthly payments to the company. In turn, it makes payments to your creditors. The company may also negotiate with one or more creditors to reduce the level of your outstanding debts.

There are numerous pitfalls in this approach:

The debt consolidator takes its money first — Many of these companies get paid upfront from your initial monthly payments. This allows interest charges to accumulate.

Your creditors do not have to respect the agreement — Nothing stops a creditor from filing a collection action.

You may make payments for years, only to face a judgment — The money you have paid in may end up being wasted.

You do not know what the future holds — Your payment plan will be based on your current income, but you could be laid off or forced to work at a lower-paying job.

You do not have the protection of the law — A bankruptcy attorney, on the other hand, can use the bankruptcy laws to put your assets beyond the reach of creditors. In addition, attorneys are held to high ethical standards, while debt settlement companies are unregulated.

Instead of going with a debt settlement company, you should consider filing a Chapter 7 or Chapter 13 bankruptcy with the help of a bankruptcy lawyer. You can be assured of getting debt relief and your property and rights will be protected.

Bankruptcy Law Firm In Chicago, Illinois

North & Sedgwick Law has helped many people obtain debt relief through the bankruptcy system. Attorney Paul Camarena has a comprehensive understanding of the bankruptcy laws and how to use them to maximum effect. Mr. Camarena will work hard to help you reduce your debts to the fullest extent possible.

Contact An Attorney

To learn more about debt settlement vs. bankruptcy and your debt relief options, contact North & Sedgwick Law.

El abogado habla español.

†The firm is a debt relief agency and helps people file for bankruptcy relief under the Bankruptcy Code.