class="design blog blogEntry blog-entry"
The Law Offices Of Ambrogio, Pletter & Associates, llc
Call Today For A Free Consultation
203-502-7436
Toggle Our Practice Areas

Is personal bankruptcy better than debt settlement?

Faced with a mountain of debt, many Connecticut residents are looking for a way out. Among the available options are personal bankruptcy and debt settlement. It is important to understand the differences between the two when charting a course of action. In many ways, personal bankruptcy offers a better path out of debt than most settlement plans.

To begin, debt settlement often takes years to complete. In many cases, consumers are advised to stop making payments on their outstanding obligations while negotiations are underway. That can cause significant damage to their credit, which will take years to recover from. The risk of lawsuits during this time also increases when debts go unpaid.

Another issue involves the final settlement numbers. Many settlement companies advertise a reduction in debt that is impressively large. It is important to understand, however, that, by the time a consumer is seriously in arrears, the total debt has been bloated by fees and interest. Even if debt settlement brings the ultimate repayable amount down to 20 percent, the consumer will be responsible for taxes on the portion that was forgiven. This can result in a hefty tax bill that many people are not expecting.

When it comes to seeking lasting debt relief, Connecticut residents should consider personal bankruptcy. While no one plans to seek bankruptcy protection, it is often the solution that makes the most sense. Compared to debt settlement, personal bankruptcy is a faster, more effective and lasting solution. That makes it an option well worth considering.

Source: dailyherald.com, "Why debt settlement is still a bad alternative to bankruptcy", Liz Weston, Sept. 3, 2017

No Comments

Leave a comment
Comment Information

Contact Us

To arrange a free consultation with an experienced Connecticut bankruptcy lawyer, call 203-502-7436 or fill out this form.

Get Started Today

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Ambrogio, Pletter & Associates, LLC
2019 Main Street
Stratford, CT 06615

Phone: 203-502-7436
Fax: 203-612-9200
Stratford Law Office Map