Debt Negotiation vs. Bankruptcy

Costs and Fees – Bankruptcy fees are significantly lower than fees charged by debt negotiation companies. Debt negotiation companies have numerous fees such as account management fees, debt settlement fees, retainer fees, and fees to defend you from lawsuits. Our team provides an upfront estimate of all costs and fees and offers flexible monthly payment plans to ensure a quick and stress-free fresh start.

Credit Score – Debt settlement involves being delinquent in debt payments, which hurts your credit score. On the other hand, bankruptcy doesn’t require delinquency and allows you to start rebuilding your credit after the case is closed. It’s important to consider the long-term effects on your credit when deciding between debt settlement and bankruptcy.

Rebuilding Credit – Debt settlement plans can last between 36-60 months and require consistent payments during that time. Unfortunately, your credit score takes a hit during this period due to ongoing delinquencies. On the other hand, opting for Chapter 7 bankruptcy can allow you to start over with a blank slate in just six months. Unlike debt negotiation plans, you won’t be burdened with monthly payments. Bankruptcy allows you to start fresh immediately.

Income Tax and Lawsuits – When settling debts through negotiation, it’s important to remember that any forgiven debt may be taxable. In some cases, a creditor may refuse to accept a settlement and instead pursue legal action. However, if you file for bankruptcy, forgiven debt is not subject to taxation and creditors are legally prohibited from further collection efforts. This means no more calls, letters, or lawsuits. Stay informed and consider your options carefully when dealing with debt.

Looking for a fresh start? Our team of experts can help you eliminate your debts while keeping your assets and property intact. We work in collaboration with you to achieve the debt relief that you want. Trust us to be a part of your team and guide you through the process.

Filing for bankruptcy stops:

• Harassment by creditors
• Foreclosure
• Debt collection and lawsuits
• Repossession
• Utility shutoffs
• IRS wage garnishment and levies
• Garnishments

Filing for bankruptcy gets rid of:

• Medical bills
• Credit card bills
• Personal loans
• Past-due utility bills
• Repossession balances
• Some taxes
• Business debt
• Personal guarantees
• Judgments

It’s commonly misunderstood that filing for bankruptcy will automatically lead to forfeiting personal assets like homeownership, vehicles, and businesses. However, this isn’t the case for most of our clients. We carefully review individual and business debt and work with our clients to make informed decisions.

Our Pittsburgh law firm offers personalized solutions with a team of experienced attorneys, accountants, and staff. For over 35 years, we’ve provided debt relief services to Western Pennsylvania and Allegheny County.