Debt Settlement vs. Bankruptcy?

Ft. Worth Bankruptcy Lawyers; Dallas, Denton, Irving, TX

Deciding Between Debt Settlement and Bankruptcy in Texas

Debt settlement is the process by which an individual lowers one’s monthly creditor payments through negotiations. Although it is often to your benefit to use a lawyer to help you negotiate a debt settlement agreement, debt settlement does not necessarily involve the judicial system. Bankruptcy, on the other hand, is legal process by which you either negotiate a formal repayment plan with the assistance of the Court or have your debt forgiven entirely.

Debt Consolidation Services

Debt Consolidation is often an appealing choice for persons who are behind on their bills and cannot afford monthly minimum credit card payments.

The seasoned Ft. Worth bankruptcy lawyers at Fears Nachawati Law Firm want you to know that although there are many legitimate ways to reduce your monthly credit card and loan payments, some companies capitalize unfairly on consumers’ frustration and fear.

These companies often advertise themselves as debt consolidators or credit counselors, but may do very little to actually help you eliminate your debt or lower your interest rates. Fortunately, the Federal Trade Commission has stringent regulations in place to regulate these companies and protect consumers from fraud.

A debt consolidation service is rarely necessary, however. Many creditors are willing to work directly with consumers to negotiate reduced payments and interest rates. If the creditor is not willing to negotiate with you individually, the attorneys at Fears Nachawati Law Firm may be able to help you and the creditor reach a mutually agreeable debt settlement plan. For those who cannot afford to repay their debts, however, bankruptcy may be a better choice than a settlement.

Options for Personal Bankruptcy in Texas

There are two primary types of personal bankruptcy: Chapter 7 and Chapter 13. While Chapter 7 bankruptcy eliminates many of your debts, Chapter 13 allows you to create a Court-approved repayment plan. If you have a relatively low income and little or no disposable income, then Chapter 7 might be a good option for you. If you have significant assets or make enough money to repay your debts over time, then Chapter 13 may the right choice.

During a free case evaluation, our knowledgeable attorneys can help you learn more about your bankruptcy options and provide you guidance on the best way to get out of debt.

To determine if you qualify for Chapter 7 or Chapter 13 bankruptcy, the Court may consider the following factors:

  • Income
  • Monthly Expenses
  • Amount of Debts
  • Type of Debts
  • Cost of Living in Your County
  • Disposable Income

In most cases, the Court will require written documentation of your income, bills and assets. This can make bankruptcy a complex process, particularly if you are trying to handle your case without professional assistance.

If you are in debt and considering bankruptcy in Texas, or want to negotiate with your creditors, contact Fears Nachawati Law Firm at . Our Dallas Fort Worth bankruptcy attorneys may be able to help you eliminate debt, lower your monthly payments, and start a fresh financial future.