If you want to negotiate your debts for less than the full amount, you should be prepared for a hit to your credit and you should consider hiring a local attorney who can defend you in a lawsuit is needed instead of an out of state agency. At Henry, DeGraaff & McCormick, we take on debt negotiation cases for $750 per creditor at a flat fee and hope to achieve a target of a 50 percent debt reduction. However, any debt settlement will require lump sum settlements, not payment plans. We can help you stave off the creditors while you accumulate the funds for a lump sum settlement and when the time is right, make the deal. You should also know that there is a potential 1099 tax event for the forgiveness of debt after the debt negotiation is made. In a bankruptcy there is no 1099 tax event and there is no possibility of a creditor lawsuit even if you are in a Chapter 13 repayment plan.

If you have important assets like a home or a car under threat of loss, if you are unable to work, if you are trapped in an adjustable rate mortgage that you can’t afford and which you are unable to refinance, or if you feel hopelessly burdened with debt that you see no way of repaying, then bankruptcy might be the right choice for you.