How do I Know What Debt Relief Method is Right for Me?

Not all debt relief options are constructed the same. Each one has its own unique criteria in which it is designed to resolve specific debt-related issues. From credit card debt and medical bills to personal loans and foreclosure, each may fall into one or a number of debt relief methods.

While there is no “cookie cutter” approach to debt relief, there are some basics that can help you determine which one is the best choice for your situation. Here is a break down of each option.

Chapter 7 Bankruptcy

Also known as “straight” or “liquidation” bankruptcy, Chapter 7 is one of the most common forms of bankruptcy. Chapter 7 bankruptcy can help you get back on your feet if you have a large amount of unsecured debt. Common forms of unsecured debt include:

  • Credit card debt
  • Medical bills
  • Personal loans
  • Payday advances

To be eligible for bankruptcy, you must pass the “means test.” The “means test” evaluates your financial situation to determine if you are eligible to file for Chapter 7 bankruptcy. Although Chapter 7 bankruptcy is one of the quickest and easiest options for debt relief, it’s essential to consult a Southern California bankruptcy attorney to find out if you qualify.

Chapter 13 Bankruptcy

Reorganization bankruptcy, also known as Chapter 13, is an option for those whose monthly income does not meet the standards for filing for Chapter 7. Another reason why someone may opt for Chapter 13 bankruptcy is to keep certain property. Some other reasons why Chapter 13 may be right for you:

  • Avoid foreclosure
  • Repayment of taxes through a payment plan
  • Reduce debt to one affordable, all-in-one monthly payment

Chapter 13 may also protect third parties, such as co-signers. If you think Chapter 13 is the right option for you, contact a bankruptcy attorney. Having an attorney on your side who understands the law can assess your situation and make sure you are choosing the best possible bankruptcy option.

Debt Settlement

If you are ineligible for Chapter 7 or Chapter 13 bankruptcy, debt settlement is another option in which you can achieve a debt-free future. Debt settlement involves negotiating with creditors without having to go to court to resolve your debt. In many cases, your debt can be reduced considerably lower than the amount owed. Besides being ineligible for bankruptcy, debt settlement may be right for you if:

  • Your debt is unmanageable
  • You have a high income
  • You have a large number of assets
  • Your moral or religious reasons oppose the concept of bankruptcy

Trying to settle your debt on your own can be a daunting task. Having an attorney on your side who knows how to deal with creditors may be in your best interest. A debt settlement attorney knows what creditors legally can and can’t do.

With over 40 years of experience in bankruptcy and debt settlement Wadhwani & Shanfeld is here to help. Contact us at (800) 996-9932 to schedule a free initial consultation.

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