Is it better to settle your debts or file bankruptcy?  As with most legal issues, that greatly depends on your specific circumstances but this article will address when debt settlement may be a viable alternative to bankruptcy.

Some debts are much easier to settle than others.  For instance, credit card companies will usually settle for a decent discount while medical creditors usually offer a much smaller discount.  You may get a very large reduction on a debt associated with a repossessed vehicle while a local plumber may offer you no discount at all.

Another factor is the stage at which the collections are at.  If the debt is recent, a creditor may be unwilling to settle as they still have hopes of collecting in full.  For debts that are many years old and are approaching the statute of limitations, the creditor could be willing to offer a significant discount.

Finally, and maybe most important, are the financial circumstances of the debtor.  If a debtor owns a home and has a good job, it may be more difficult to settle a debt because the creditor will believe they can be paid in full.  On the other hand, if a debtor has no job and minimal assets, a creditor is much more likely to accept a smaller settlement.

Because there are so many factors involved with debt settlement, it is wise to consult with an experienced debt settlement attorney before giving any information to creditors.  At Aguero Law, we will analyze your financial situation during a free initial consult and will discuss whether a settlement plan is a viable option for you.  We have helped many clients avoid bankruptcy by working out acceptable settlements and/or payment plans with creditors.