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Bankruptcy and Debt Settlement


                                   BY LAWYER HOLLIS JOSLIN

There are options to bankruptcy and these options should be carefully weighed before making the decision best for resolving debt issues. For example, let's say you have $10,000.00 in unsecured debt and another $10,000.00 in debt for a car loan. In some circumstances the unsecured creditors may allow you settle for 50% of what is owed and the dealership may be willing to take your current vehicle as a trade for a more affordable car. In this instance your total out of pocket expense for the unsecured debts could be just $5000.00. Compare that with an average chapter 7 bankruptcy cost of around $2500.00 and as you can see, the net benefit to you to file bankruptcy would only be about $2500. Pretty small change for such a drastic step as filing bankruptcy. You get the point. Discuss all of the details with your bankruptcy/debt settlement lawyer and you may find there are indeed affordable options to bankruptcy. If not, well, at least you are now in a position to make the most informed decision. Do be aware however that there can be tax consequences to debt settlement. Consult with an accounting professional about that.