Debt Settlement vs Bankruptcy

Debt settlement means negotiating with a creditor to resolve an eligible debt for less than the full balance, with a lump sum or payment plan. There is no minimum or maximum amount we can settle. We handle settlement of credit cards, personal loans, medical bills, private student loans, business debt, and judgments.

Creditors are not required to accept an offer. Settlement will affect your credit and may have tax consequences. It does not automatically stop a foreclosure sale, a repossession, or a garnishment the way a bankruptcy filing can. When a creditor will work with you and you can fund the deal, settlement is an excellent option.

See the Georgia settlement page and example results. Those examples are from our work, not a promise for your case.

Chapter 7 can wipe out all unsecured debts if you qualify — credit cards, medical bills, personal loans, and even some older tax debt. You almost always have the option to keep your house and car if you stay current. Filing can stop lawsuits and garnishments through the automatic stay. Chapter 7 cases are usually completed in about 3–4 months.

Chapter 7 is not a good keep-the-house tool if you are already behind on the mortgage. It also has income limits — so if you make too much money you may not qualify. Student loans are usually not discharged in chapter 7 — the best option for private student loans is settlement.

Chapter 13 consolidates debts into one monthly payment. Unsecured debts in the plan may be paid at varying percentages depending upon your situation; you may pay only a portion of what you owe. It will stop foreclosure or repossession and let you catch up arrears through the plan. Plans are usually 5 years or 60 months but sometimes can be shorter.

Chapter 13 is often the better tool when you want to keep a house or car you are behind on, or when you want to file bankruptcy but cannot qualify for Chapter 7.

We look at income, assets, the kinds of debt, whether you have been sued, whether a house or car is at risk, and whether you can fund settlements. Paying everyone in full while interest keeps running is usually the slow (or even impossible), expensive path once balances have gotten ahead of you. “Debt help” programs and companies that are not a law firm have left plenty of people still owing the original debts.

If you already know which path you want, just let us know and we can get your case started. If you do not, we will lay out debt settlement, Chapter 7, and Chapter 13 in plain language and let you decide.