As more Americans are burdened with additional debt they can't pay many are wondering if they should attempt to settle their debt or file for bankruptcy. As we have often mentioned debt settlement is usually a bad alternative if you have multiple debts and no cash to pay the settlement offer.
For example, if you owe $50,000 on credit cards, $120,000 in student loans and $701,000 on a home, would you be able to come up with at least $25,000 cash to pay your credit card debts and continue to pay your mortgage and student loan payments? Also, would you be able to convince ALL of your credit card lenders to reduce the debt owed? Probably not.
On the other hand, filing bankruptcy may discharge your credit card debt and allow some negotiating room with your mortgage lender. Some mortgage lenders may be willing to modify the loan during a bankruptcy; but be careful and make sure that the loan modification is affordable. Many mortgage modifications eventually end in foreclosure because they don't fit the debtor's budget.
In the case of the student loan, they offer several reasonable payment plans, including one that offers loan forgiveness after 25 years of payments. Depending on your income you may also file Chapter 13 bankruptcy which will allow you to repay your debts over a 3 to 5 year period. To find out more about Chapter 7 and Chapter 13 bankruptcy, contact a Dallas-Fort Worth bankruptcy attorney today.