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Bankruptcy Vs. Other Debt Relief Options

In the last decade or so, there has been a significant rise in alternative debt services, including debt settlement services and consumer counseling services. You have probably seen their advertisements on TV or online.

Despite all of the advertising for these services, bankruptcy is often a better solution for individuals with significant debt. I am attorney Steven F. Bilsky, and I can explain the primary advantages of a bankruptcy filing.

What They Don’t Tell You About ‘Debt Settlement’

The commercials you have seen on television for debt settlement companies do not always tell the whole story. Debt settlement agreements have many potential disadvantages:

  • Debt that is forgiven through a debt settlement agreement may have tax implications. You may even be required to pay taxes on the amount of debt that has been forgiven.
  • Some debt settlement programs are little more than a sham, often costing you money you cannot afford and providing no debt relief.
  • Debt settlement agreements may not reduce your debts by nearly the same amount as a Chapter 7 or 13 bankruptcy. You may struggle for years burdened with those debts.
  • Debt settlement agreements do not offer the benefit of the automatic stay (see below).

The Advantages Of Bankruptcy

In contrast, Chapter 7 or Chapter 13 bankruptcy has many advantages over credit counseling services. Consider these benefits:

  • Chapter 7 bankruptcy results in a permanent discharge of most debts, including credit card bills, medical bills and most other consumer debts.
  • Chapter 13 bankruptcy creates a debt repayment plan. You are only required to pay what you can afford to pay. Any amount of your unsecured debts that you show you are unable to pay, and which are dischargeable under the U.S. Bankruptcy Code, may be discharged upon completion of your Chapter 13 plan.
  • You are not required to pay taxes on debts that are discharged with a Chapter 7 or 13 bankruptcy.
  • When you file for Chapter 7 or 13 bankruptcy, an automatic stay order will go into effect, which will temporarily halt most creditors from taking any further collection activity against you.

Helping With Tennessee Bankruptcies Since 1980

You can rely on me for the skilled, experienced and highly personalized representation you require. I have been a practicing bankruptcy lawyer for more than 39 years. I have helped thousands of clients obtain debt relief. I care about my clients and work hard to make a positive difference in their lives.

As a solo practitioner, I work closely with my clients, take time to understand their financial circumstances and tailor a debt relief strategy that is designed to address their particular needs. As a client of my firm, you will have a strong advocate on your side.

Contact Me For Help

I serve clients throughout the Memphis metropolitan area. To schedule a free initial consultation with me, call 901-525-6692 or use my online form.

The Law Office of Steven F. Bilsky is a debt relief agency that helps people file for bankruptcy relief under the Bankruptcy Code.