Not Sure if Chapter 7 Bankruptcy Is Right For You?

The Debt Settlement Alternative & What It Means in Your Pursuit to Control Your Finances

Although Chapter 7 bankruptcy may be a life-changing decision for people facing mountains of unsecured debt, it may not be the right decision for everyone.

For more information on Chapter 7 bankruptcy and your other debt-relief options, fill out our free, no-obligation evaluation form or call 1 (888) 632-0501 to be connected with a local bankruptcy lawyer.

What Is Debt Settlement?

If you're unsure about filing bankruptcy, consider debt settlement as an alternative to Chapter 7 bankruptcy.

Debt settlement is an alternative to filing bankruptcy that may help reduce your total debt by as much as 50 percent to help you pay off your bills and get out of debt.

How it works: A debt settlement agency works on your behalf with your creditors. The agency acts as an intermediary between you and the people you owe, all the time negotiating down fees, interest rates and your original debt. In the end, you should have less payoff amounts, making it easier to pay off your debt.

Some Advantages of Debt Settlement

If debt settlement is executed properly, it may save you money and help you climb out of debt. If you choose debt settlement, you likely won't have to file bankruptcy and you won't have a bankruptcy filing on your credit report.

Similar to filing Chapter 7 bankruptcy, you won't have to deal with your debtors if you hire a debt settlement agency. The agency is there to take care of that communication.

Some Disadvantages of Debt Settlement

When you're faced with any important decision, it's important to examine both the pros and the cons of your options. Just as in any financial choice, there are disadvantages to debt settlement too.

For example, not all debt settlement firms are "above board." Some agencies are not upfront about their practices.

Most debt settlement agencies aren't in existence simply because they want to help people get free from debt; just like other companies, they are likely in business to make as much profit as possible.

Dishonest debt settlers may wind up costing you big bucks—sometimes putting you in a worse financial situation than you were in before you went to them for financial help.

If you decide to choose debt settlement as the answer to your financial woes, make sure you do extensive research on the debt settlement agency you choose.

Some Tips to Consider When Choosing Your Debt Settlement Agency

The first step toward debt settlement is deciding if it's right for your particular situation. Facing your debt and decided to do something about it is a major decision. If you prefer to receive some more advice about your next financial move, a bankruptcy lawyer can evaluate your options.

The next step toward debt settlement is hiring a debt settlement agency. As mentioned above, it's important to research the facts about which debt settlement agency you choose.

Below are some helpful tips on choosing a good debt settlement agency:

Don't feel that you have to settle on the first debt settlement agency you see in the phonebook

All agencies are not created equal. It's a good idea to survey a few agencies in your area to find the best fit for you.

Watch out for debt settlers that try to force you to sign a contract without you first reviewing it

Be weary if you feel pressured to immediately sign a contract. If there's nothing to hide, a debt settler shouldn't try to talk you out of reading the contract in full. It's also a red flag if a debt settler attempts to "explain what the contract says" to "save you time."

Be cautious if a debt settlement agency demands expensive preliminary fees

Remember, the purpose of a debt settlement agency is to save you money and reduce your debt. If an agency demands that you pay unreasonable fees in order for them to start helping you, you should probably walk away.

Find another agency if a debt settler rushes your debt consultation

If a representative won't take the time to listen to you or analyze your finances, then they're probably not worth your time. Ask yourself how they plan on helping you if they don't even try to understand your situation.

Turn around if they encourage you to default on your accounts

If a debt settlement agency suggests you allow one or more of your accounts to go into default, don't work with that agency. Some agencies may insist they can't negotiate your debt unless your account goes into default. This is not true. Defaulting on any payments can result in serious damage to your credit score or even result in wage garnishment or foreclosure.

Determine What Debt Relief Option Is Right for You

This is your life. You are in control of your financial future. Whatever decision you choose, make sure you are well informed about the pros and cons of your decision.

If you need help in making a decision on which debt relief choice is best for you, a bankruptcy attorney is a resource who can provide you with some more information.

Connect to a local bankruptcy lawyer today by filling out Chapter7.Me's free, no obligation evaluation form or by calling 1 (888) 632-0501.