Question Detail: What is the difference between debt settlement and bankruptcy? I have several maxed credit cards that I can’t pay and need to get rid of this debt. Is bankruptcy cheaper than a debt settlement?
Answer: The answer is yes, except in rare circumstances (usually when the debtor has substantial equity in a house or other property). Bankruptcy produces the ‘biggest bang for the buck.’ You might say it’s the best return on your money you will ever get. Additionally, debt settlement plans have no teeth to bite back against unruly and unscrupulous creditors. Bankruptcy, on the other hand, can protect you if your creditors don’t follow the rules. There are so many debt settlement scams out there, so proceed with caution. In our experience, the non-profit organizations who offer debt settlement, counseling and other debt-related services, seem to be among the more reputable and safer organizations to try. Got a question about debt and bankruptcy? Craig Swapp & Associates’ Utah chapter 7 bankruptcy attorney would be happy to answer it. Please submit your question online and we’ll respond as soon as possible.