Settle your debts instead of being called a bankrupt

Are you thinking of filing a bankruptcy just because you’re unable to make minimum payments on your bills? If yes, then you must take some time to search for a debt relief program that can help you repay your entire obligations. You can take help of a debt settlement program where the professionals will suggest you certain ways that can help you come out of such stress. If you still can’t make your decision, then you must try to gain knowledge about the consequences of both the programs so that, you’re able to decide which way you should go.


When you’ll file a bankruptcy, you’ll find that basically there are two types of bankruptcy, chapter 7 and chapter 13. Before you file a bankruptcy, try to hire a bankruptcy lawyer who will help you know under which chapter you must file your bankruptcy.

Chapter 7 bankruptcy:

When you’ll file a chapter 7 bankruptcy, all your non exempt property will be liquidated to repay your entire debts within 4-5 months. Thus, within a short span of time you’ll be able to become stress free and can make a fresh start. Though it sounds enticing but it will have negative effects on your credit score. You have to carry the black mark of bankruptcy on your credit records for a long period of time. This will also affect your ability to take out a loan or acquire a job. In fact you may even face problem to search a living place because in some places there are rental owners who will check your credit reports before he will rent you a home.

Chapter 13 bankruptcy:

When you’ll file a bankruptcy under chapter 13, you’ll be offered a debt repayment plan which you must follow to repay your debts within a certain period of time. After that period if there is any unresolved debt, then it will be wiped out or forgiven. Here, though you’re repaying your debts under repayment plan your credit score will be greatly hurt and will hinder our effort to take out a loan or purchase an insurance policy at a reasonable price for a certain period of time.

Debt settlement program:

When you’ll enroll in a debt settlement program, the representative of the company will assess your financial condition. They will suggest you certain ways how you’ll be able to save your hard earned money. They will negotiate with your creditors to reduce the outstanding balance of your debt. Now, you have to make monthly payments to raise the settled amount. For this, you have to quit your extravagant life and lead a frugal life so as to save maximum part of your earning which you can use to build up your settled amount. After you have arranged a certain part of your settled amount, the settlement company will start disbursing it to your creditors. This way you’ll soon be able to repay your debts.

Thus, with the help of a debt settlement program though you’ll be able to repay your debts but your credit score will be hurt. But if you follow certain credit repair tips you’ll be able to repair it quite soon. You must opt for chapter 7 or chapter 13 bankruptcy as a last resort when you have no other options left. It’s because, after you’ll file a bankruptcy you’re credit score will be slashed down up to 250 points. Apart from that, bankruptcy is a public record and debt settlement program will keep your privacy intact. Thus, it will be quite effective for you to settle your debts than to file a bankruptcy.

Shah Peerally is an attorney licensed in California practicing immigration law and debt settlement. He has featured as an expert legal analyst for many TV networks such as NDTV, Times Now and Sitarree TV. Articles about Shah Peerally and his work have appeared on newspapers such as San Jose Mercury News, Oakland Tribune, US Fiji Times, Mauritius Le Quotidien, Movers & Shakers and other prominent international newspapers. His work has been commended by Congress women Nancy Pelosi and Barbara Lee.  He has a weekly radio show on KLOK 1170AM and frequently participates in legal clinics in churches, temples and mosques.


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Attorney Shah Peerally also deals in debt settlement. For more information call us on 510.742.5887 and visit us on

Information provided above is for educational purposes only.  One should not act or refrain to act solely based on the information provided.  You should consult an attorney to assess your case before proceeding.

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Disclaimer: The views expressed on this website are not necessarily those of Shah Peerally or his law firms. No attorney client relationship is created by reading any message or articles posted on this blog.