Do Bankruptcy Lawyers Work On Credit Card Settlements

Bankruptcy lawyers typically specialize in assisting clients with bankruptcy filings and proceedings. While they may have knowledge about debt settlement options, their primary focus is on helping individuals or businesses navigate the bankruptcy process to either restructure their debts or have them discharged.

Credit card settlements, on the other hand, involve negotiating with creditors to settle debts for less than the full amount owed. While some bankruptcy attorneys may have experience in negotiating debt settlements as part of their overall practice, they may not specifically specialize in this area.

If you’re considering credit card settlement as an alternative to bankruptcy, you may want to seek out a lawyer or firm that specializes in debt negotiation and settlement. These professionals often have experience in negotiating with creditors and can advise you on the best course of action based on your specific financial situation and goals.

When it comes to credit card debt, bankruptcy lawyers and debt settlement are two distinct approaches, each with its own implications. Let’s explore both:

1. Bankruptcy Lawyers:
   • Role: Bankruptcy lawyers specialize in guiding individuals through the bankruptcy process.
   • Types of Bankruptcy: There are two common types:
     • Chapter 7 Bankruptcy: Often referred to as “liquidation bankruptcy,” it involves selling non-exempt assets to pay off debts. Some debts may be discharged entirely.
     • Chapter 13 Bankruptcy: Also known as “reorganization bankruptcy,” it allows debtors to create a repayment plan over several years.
   • Impact on Credit: Filing for bankruptcy significantly affects your credit score and remains on your credit report for years.
   • Pros and Cons:
     • Pros: Provides a fresh start, stops creditor harassment, and offers legal protection.
     • Cons: Long-lasting impact on credit, potential loss of assets, and legal fees.
   • When to Consider: If you’re overwhelmed by debt and need a comprehensive solution.
2. Debt Settlement:
   • Role: Debt settlement involves negotiating with creditors to pay a reduced amount (usually less than what you owe) to settle the debt.
   • Process:
     • You or an attorney negotiate directly with the credit card company.
     • If successful, you pay a lump sum to settle the debt.
   • Impact on Credit: Debt settlement can negatively affect your credit score, but it’s generally less severe than bankruptcy.
   • Pros and Cons:
     • Pros: Potential reduction in debt, avoids bankruptcy, and quicker resolution.
     • Cons: Credit score impact, upfront payment required, and not all creditors agree to settle.
   • When to Consider: If you’re unable to pay the full amount owed and want to avoid bankruptcy.

Bankruptcy lawyers can work on credit card settlements as an alternative to filing for bankruptcy.