Why not consolidate or use debt counseling rather than file for bankruptcy?
Consolidation from these companies that advertise on TV and radio are basically offering repayment plans that are doomed not to succeed because they keep you in huge debt. They often shade the truth about how much of your debt they are really paying back. You may actually end up paying more in the end than what you originally owed and you may receive law suits from some of the creditors that were supposedly being paid off. They will have you in 5-year repayment plans that can easily damage your credit because you will still owe creditors. Be cautious if you are considering using a credit counselor. Also read about the problems of unscrupulous companies in the credit counseling industry and the action the IRS has taken against “non-profit” credit counseling groups following widespread abuse.
If filing a Chapter 7 instead of being scammed in a consolidation plan from a “non-profit” consolidator, Chapter 7 discharges debts like credit cards, medical bills, gym memberships, parking tickets, high utility bills, some IRS debts and most lawsuits [even those who are sued from a a previous car accident] and unsecured loans.
If filing a Chapter 13, in many cases, depending on your assets and income, all unsecured debts are discharged. In some 13’s, if your income is above the means test or you have too much equity in your home, a percentage of the unsecured debt is paid through the plan and the remainder of the unsecured debt is wiped out by the 13 discharge.
In consolidation plans from these “non-profit” companies, you will often still owe at the end of your 5-year ordeal and your credit will be damaged.
Since each individual has different circumstances, we urge you to call us to discuss your options for bankruptcy.
Lee Abt is an Experienced Bankruptcy Atorney in New Jersey - Call Today!