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Bankruptcy or Debt Reduction. What Should I Do? – Brenda

My question is which is the best alternative: dealing with a company who promises to help reduce of eliminate the debt or file bankruptcy? Total credit card debt is around 40,000 and am keeping up the minimum payments but looking at the interest rates, the debts are likely not to be paid until years from now. Also, these payments pretty much leave nothing leftover during the month for other unexpected expenses. Looking forward to your response. Thank you!

brenda




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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  • How many different cards make up the $40,000? Debt settlement usually means you need to build up a savings in order to settle each card. If you have high balances, then you can end up getting sued before you have enough to settle any of those large cards. Most of the debt settlement companies, the bad ones, end up taking all their fees in the beginning – making it even harder to save up settlement amounts.

    You may want to consider chapter 7, if you qualify, to wipe out the debt. Or a chapter 13, to pay some, or maybe all, of the debt over 36-60 months.

    See my blog post about debt settlement v. chapter 13.

    http://www.lrlawoffice.com/ban

  • How many different cards make up the $40,000? Debt settlement usually means you need to build up a savings in order to settle each card. If you have high balances, then you can end up getting sued before you have enough to settle any of those large cards. Most of the debt settlement companies, the bad ones, end up taking all their fees in the beginning – making it even harder to save up settlement amounts.

    You may want to consider chapter 7, if you qualify, to wipe out the debt. Or a chapter 13, to pay some, or maybe all, of the debt over 36-60 months.

    See my blog post about debt settlement v. chapter 13.

    http://www.lrlawoffice.com/bankruptcy-florida-debt-consolidation/

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