What is the Difference Between Filing for Bankruptcy and Debt Settlement?
A person cannot go more than a few days without hearing a radio or TV advertisement stating that some company can consolidate or settle your debts
and negotiate with your lenders to obtain lower interest rates and payment terms. The truth is a lot of these companies are scams who collect your money and do nothing more. If you do decide to hire a company to settle your debts
, you should make sure that the company is reputable and if possible, a law firm. If the debt settlement company does take action and negotiate your debts with your creditors, there is a very high likelihood that you will not be able to make your payments every month, resulting in continued harassment by creditors. The goal of debt settlement companies is to make your payments more affordable; however for many people this is not possible and they get no relief from their debt. If you do find a legitimate company who renegotiates your debts at a lower rate, you will be expected to make a single monthly payment, much like in a chapter 13 bankruptcy
. In a chapter 13 bankruptcy you will only have to make payments for 3-5 years and in many situations discharge whatever you have not paid off at the end of the payment plan. A debt settlement plan does not allow for any sort of discharge prior to you paying off a high percentage of your debt.
Explanation from a Seattle Bankruptcy and Debt Settlement Attorney
Several of our clients have stated that debt consolidation programs have been nothing but a waste of money and they should have filed for bankruptcy in the first place. Here is an actual quote from one of our clients:
“The only time I stopped paying was when I went into the debt consolidation program which was the biggest mistake I ever made… what a joke.”
If you file for a chapter 7 bankruptcy with a bankruptcy lawyer, most, if not all of your debts can be wiped away and you can start fresh. A debt settlement program does not allow you to start fresh and you will continue to be haunted by a mountain of debt in which it is very likely that you will never get out from under the debt. If you have already signed up for a debt settlement plan and have made payments it is very likely that if you decided to file bankruptcy, a bankruptcy trustee would contact the debt settlement company and take back any money you have paid and apply that money to paying off your creditors should you file for bankruptcy. Contact the Symmes Law Group today for a free consultation at 206-682-7975 and let’s discuss your options.
What is Financial Self Defense? (7/31/2019) - Financial self defense is a term used to describe your overall financial well being and planning for the future and unknown. I had the chance to discuss this topic on 1150 AM KKNW radio with Dr. James Gore the host… 10 Things that Prevent Consumers from Getting Out of Debt (7/11/2019) - Most consumers who are buried in debt are likely looking for options in getting out of debt. There are options to get out of debt, such as debt settlement, chapter 7 bankruptcy and chapter 13 bankruptcy, but a consumer needs… How Can Bankruptcy Benefit Real Estate Investors and Consumers? (4/19/2019) - Last week attorney Richard Symmes had the opportunity to be on one of our favorite podcasts for real estate investing, the Seattle Investors Club Podcast. In the episode you will learn about attorney Richard Symmes’ background and experience in bankruptcy… How Do I Rebuild My Credit After Filing Bankruptcy? (3/31/2019) - If you are considering filing for bankruptcy or you have recently filed for bankruptcy, you may be wondering, how do I rebuild my credit after filing for bankruptcy? Attorney Richard Symmes discussed how to rebuild credit after filing bankruptcy on… What are Possible Remedies for An Unlawful Foreclosure? (3/2/2019) - If your home has been foreclosed upon, you may be looking for possible remedies for what you may consider an unlawful foreclosure. In Washington state most foreclosure sales have to go through the Washington state non judicial foreclosure process. It… Can I Qualify for a Home Loan with a Low Credit Score? (2/3/2019) - The short answer is yes you can qualify for a home loan with a low credit score, but the higher the credit score the lower your interest rate on the loan will be, which will determine which programs you qualify… How Long After Bankruptcy Can I Buy A House? (11/14/2018) - If you are wondering how long after bankruptcy can I buy a house? You are not alone. Getting a mortgage after bankruptcy can seem to be a never-ending process. However, with the assistance of our mortgage experts, you can… What Happens After Filing Bankruptcy? (9/28/2018) - One of the most common questions that I am asked as a Seattle bankruptcy attorney is what happens after filing bankruptcy? This is a loaded question and how things transpire after filing bankruptcy will depend on each case individually however… Should I Use National Debt Relief to Settle My Debts? (7/8/2018) - In my debt relief practice I am coming across more and more consumers who have used National Debt Relief to help them manage their debts and negotiate settlements on their behalf, only to regret the decision to sign up with… How Can You Sell Your House Before it is Foreclosed On? (5/26/2018) - If you are suffering from financial hardship and facing home foreclosure, you may be able to sell your house before it is foreclosed on in order to avoid having a foreclosure sale report on your credit report and walk away…