Debt Settlement Vs Bankruptcy

Q: I have 45,000 in credit card debt. I have good credit with my creditors, but sporadic unemployment over the past 2 years has caused my credit amount to soar. I work as software consultant (looking for a full-time job), and may have some periods of unemployment in the future. I'm currently working however, and it looks like I'll be employed through 2005. A friend of mine used Homeland Financial Services to do a debt settlement for 23,000, and had success with it. She didn't own a home and was delinquent on her account. I've been reading the FTC website, and it looks like a lot of these companies are scams. Has anyone else had success with them? I'm considering Chapter 13. 20,000 of my debt is on a fixed 4.0% interest rate. If I'm willing to do a Chapter 13 (no bluff), how likely is it that an attorney can do a debt settlement with one or both of credit cards before actually filing for bankruptcy?

A: If your attorney is successful in arranging the settlement, there would be no need to file bankruptcy under any chapter. Folks like to get paid, and, if you offer a settlement that's better than what they would get in a bankruptcy, generally you will see some degree of co-operation. When there are many creditors there often is one who won't go along. With only two creditors, your chances of getting both on board increase. .

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