Debt Settlement


The bankruptcy attorneys at Perrotta & Cahn focus on helping consumers and businesses confront and overcome financial difficulties. When you come to us, we will assess your debt situation and provide you with honest, professional advice as to your best option for taking control of your finances, whether it is Chapter 7 or Chapter 13 bankruptcy or an alternative, such as debt settlement. We have offices in Cartersville, Calhoun, Dalton and Dallas to conveniently serve clients throughout northwest Georgia.

What is Debt Settlement?

Debt settlement typically involves approaching a creditor and negotiating a lower payment on an outstanding debt. Lowering your payment may entail lowering the principal balance, lowering the interest rate, or negotiating a final figure that will settle the debt in one lump sum payment. Creditors often accept debt settlement if they stand to get nothing if you file for bankruptcy.

When to Pursue Debt Settlement

If you make too much money to qualify for bankruptcy, but are still unable to meet your financial obligations, debt settlement may be a good option for you. For example, in order to be eligible for Chapter 7 bankruptcy, you must earn less than Georgia’s median income or pass a “means test” before filing for bankruptcy. At Perrotta & Cahn we realize that the poor economy affects people who do not meet these types of restrictions, and help with debt settlement as an alternative to bankruptcy.

In some cases, creditors mark settled debts as “paid in full,” which also appears on your credit report. This helps to remedy any harm done to your credit score because of late or delinquent payments in the past. Thus, debt settlement can help when your goal is to rebuild your credit.

Debt Settlement versus Bankruptcy

While not all debtors need bankruptcy, debt settlement can be quite cumbersome and frustrating if you have more than a few creditors. This is because you must negotiate with each creditor individually, and you cannot be sure that every creditor will be open to bargaining with you. Furthermore, while you are negotiating with one creditor, another may continue to harass you with phone calls and mailings.

On the other hand, if you file for bankruptcy, the bankruptcy trustee brings all of your creditors together, and they are required to follow one court-supervised plan. Also, once the automatic stay goes into effect, creditors must end all debt collection efforts.

With all of these factors, it is important to talk to an attorney who handles both debt settlement and bankruptcy to ensure your case is handled according your unique needs and goals.

Contact an Experienced Debt Settlement Attorney in North Georgia

If you are considering debt settlement or bankruptcy, please contact Perrotta & Cahn for a free initial consultation. Our goal is to help you make a fresh start and achieve financial stability.