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Is Chapter 7 worth considering over debt settlement?

Financial struggles can bring about a great deal of hardship for anyone. Louisiana residents who have accumulated considerable credit card debt may worry about paying their bills, dealing with possible embarrassment relating to their situations and other stressful aspects of money issues. Fortunately, debt relief methods, particularly Chapter 7 bankruptcy, may be able to help.

Before filing for bankruptcy, some individuals may want to consider other options. For instance, many parties may think that debt settlement plans are a better way to address outstanding liabilities. However, reports indicate that many individuals typically pay between 65 percent and 80 percent of the original amount owed. This percentage does include the fees that most debt settlement companies charge for services.

Settlement plans can also take years to complete. The report indicated that slightly more than half of the plans started in 2013 were completed by March 31, 2017. Additionally, more than 40 percent of individuals who started the plan in 2013 simply terminated their agreement and backed out of the plan. It is also important to note that not all creditors are willing to work with debt settlement companies, which could leave parties on the hook for the entirety of certain debts.

If this option seems less appealing, it does not mean that no other methods for relief are out there. Chapter 7 bankruptcy could help qualifying individuals address their debts in a shorter amount of time and in a greater capacity. Louisiana residents who would like to learn more about this type of bankruptcy would find it helpful to speak with knowledgeable attorneys.

Source: USA Today, "Debt settlement plan: 5 questions to ask before resorting to this option to pay off bills", Andrew L. Wang, April 18, 2018

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Richoux Law Firm, L.L.C.
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