This debt options comparison chart provides Connecticut residents with information about their debt options and will assist you in making an informed decision as to whether bankruptcy or debt settlement is right for you. Feel free to contact our office with any questions.
Click to our automatic Debt Options Calculator below to test your options with the actual amount you owe.
This Chart is not a definitive representation on the positives and negatives either option so it’s advised to discuss your case with your bankruptcy attorney.
+ Debt Management
|
Also known as Credit Counseling |
|
| + (Positives) | – (Negatives) |
|---|---|
| Might obtain a good credit score | Might not obtain a good credit score |
| Private | Most Expensive Option |
| Can be sued but less likely | Can be sued |
| Avoid Bankruptcy | Low rate of Completion of DM Plans-50% est |
| 100% repayment | 100% repayment-higher monthly payment than DS- 60 months; you still pay interest on the debt |
| Some Creditor Harassment | |
| No Automatic Stay against Creditor as in Bankruptcy | |
+ Debt Settlement
|
Also known as Debt Settlement – Debt Negotiation |
|
| + (Positives) | – (Negatives) |
|---|---|
| Private—No public disclosure of personal information. No public hearings. | Income Taxes—cancellation of debt can be ‘imputed income’ but not if your are insolvent |
| Avoid Bankruptcy | Credit Score will be poor during the entire program |
| Less Expensive than Debt Management or Credit Counseling -Smaller total pay-out | Interest, penalties, late fees continued to run |
| Lower Monthly Payment than Debt Management or Credit Counseling. You aren’t paying interest on the debt. | Credit Harassment more likely than Debt Management |
| Can be preferable to Chapter 13 where Trustee insists on a 100% dividend to unsecured creditors. | Doesn’t Stop Law Suits or garnishments |
| Might have a lower monthly payment than in Chapter 13 Bankruptcy | 24–60 months to complete Debt Settlement Plan |
| Payment in full on debts versus pro rata payments in Chapter 13-more debts are settled quicker. | Low rate of completion |
| No Automatic Stay against Creditors as in bankruptcy | |