These are rough times. money troubles cause stress. The stress make the problems worse. Problems pile on problems. A decision to make is which bills to pay or skip. What is happening to the credit rating? How to return to better times? Where can you start to come up with a plan? There is a range of solutions, and a lawyer can help you to decide which end of the range is appropriate for you. In Milwaukee Chapter 7 bankruptcy is the most severe. The other extreme is Milwaukee debt settlement. But how do these two extremes differ?
The first difference between the two solutions is in the effect on your credit score. At this point, your credit rating is damagedhurt, and your main goal is to repair and improve it. The plan that will have the least effect on your credit rating is the debt settlement. Under this solution, you begin taking classes so that you can avoid a similar situation in the future. The purpose of the debt settlement plan is to transform a chaotic debt situation into a well-thought-out plan to pay it off. In contrast, the Chapter 7 plan consists of erasing as many of the debts as possible. Because creditors do not want to lend money that will not be paid back, they are understandably reluctant to someone who has a history of officially reneging on the agreement. The bankruptcy remains a stigma on your credit record for many years.
The second difference would be concerns about your feelings of self-esteem and pride. When you choose the debt settlement solution, you work with the attorney and the creditors to agree on how much of the total debt you will pay. Sometimes a large lump sum payment is required. When you have completed this plan, you can take pride in having lived up to at least a part of your obligation. On the other hand, when you go for the Chapter 7 bankruptcy, the plan divides your assets and debts into the categories of assets you can keep, debts you must pay, and debts that disappear. While this plan has its advantages, you will not have a sense of accomplishment. Even during times like these, there can be a sense of humiliation and failure attached to declaring bankruptcy.
There is a flip side to the previous point. There are times when debt settlement is not the best answer. If the gap between the level of debt and the ability to pay is too great, bankruptcy is often the best solution. When this is the case, filing a Chapter 7 bankruptcy can provide the ability to draw a line in the sand and get a fresh start. While a bankruptcy causes long lasting damage to your credit and financial abilities, it can give you the breathing room to reconfigure your personal and financial life. In spite of its drawbacks, it can end you up in a good place at a point in the future.
So before deciding which path to follow in improving your financial situation, consider the options carefully. And, as always, discuss the possibilities with an attorney.
Connor R. Sullivan recently researched Milwaukee chapter 7 bankruptcy files for an article he is writing on the subject. His sister had a Milwaukee debt settlement that needed to be resolved.
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