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Home > Reader Questions > Is Debt Settlement an Option if I Can’t File Chapter 7 Bankruptcy? – Becky

Is Debt Settlement an Option if I Can’t File Chapter 7 Bankruptcy? – Becky

Recently-well 2 years ago had a foreclosure. My ex and I split up and attempted a short sale and it fell through and they foreclosed on the home without us knowing. To mak a long story short, I was told by multiple financial advisors and lawyers that a reaslistic option with my credit card debt and the foreclosure was chapter 7. I have not been paying on my credit cards-t-I have paid my the bankruptcy company and now they have all gone to cllection/charge off on my credit report. So now my lawyer is saying I make too much money to file chapter 7. I am so frustrated.

Is debt settlement a option if I can’t file chapter 7? I was being sued by a collections agency but it was stopped because I was filing for bankruptcy, so if I don’t do the bankruptcy will the sueing process start again. will they garnish my wages if Im working with a debt settlement company

Becky

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  • Damon Day

    Hello Becky,

    Given your circumstances, I am not sure if a Debt Settlement will be a good option unless you have been saving money or have access either now or in the near future to make lump sum settlement offers. Given that you are already this far behind and there is pending legal action, unless you can raise the funds fairly quickly, settlement might not be the best route.

    Even though you are unable to qualify for chapter 7, did you explore a ch.13 to see how that would play out for you? Do you foresee any changes to your income in the next 6 months or so? How far over the income cap where you? If you are close, I would get a second opinion from another BK lawyer. Depending on your circumstances, there are ways to still file a chapter 7 if you make over the median income. Sometimes lawyers can get lazy or just not take the time to really investigate it before they say you make too much.

  • http://DamonDay.com Damon Day

    Hello Becky,

    Given your circumstances, I am not sure if a Debt Settlement will be a good option unless you have been saving money or have access either now or in the near future to make lump sum settlement offers. Given that you are already this far behind and there is pending legal action, unless you can raise the funds fairly quickly, settlement might not be the best route.

    Even though you are unable to qualify for chapter 7, did you explore a ch.13 to see how that would play out for you? Do you foresee any changes to your income in the next 6 months or so? How far over the income cap where you? If you are close, I would get a second opinion from another BK lawyer. Depending on your circumstances, there are ways to still file a chapter 7 if you make over the median income. Sometimes lawyers can get lazy or just not take the time to really investigate it before they say you make too much.

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