If you are trying to decide which is the best route, chapter 13 bankruptcy or debt settlement, there are a few important things you must first understand.
Debt settlement is a way for you to work out a reduced price and pay off your debt entirely to your creditor.
With the assistance of a debt settlement company you can arrange to have your debt severely reduced on the condition of totally paying it off in one lump sum.
These credit counselors have the knowledge and ability to drastically reduce your debt, stop interest from accumulating and have fees removed.
Chapter 13 bankruptcy, on the other hand is a repayment plan established by the bankruptcy court for you to repay your creditors.
The court, not you, decides what will be repaid and how much monthly you will need to repay.
You will have to submit a payment to the court each month for them to pay out to your creditors.
There will be processing fees attached to this each month and there is no room for failure.
If you are late and/or miss a payment to the courts you will be in direct violation of the bankruptcy and enter into default.
This can cause the immediate seizure of your property to be put up for sale by the court to pay your debts.
On a simpler and kinder note you can contact a debt settlement agency to assist you in finding a way to pay off your obligations at an amount and time frame you can actually meet.
Counselors will review all your income and debt and work with you and your creditors to reach a compromise to pay off your debts completely.
This will allow you to realistically deal with your debt and work towards a more stable financial future.