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Debt Consolidation

 

 

 

 

 

 

 

 

 

 

 

 TASK

BANKRUPTCY ADVANTAGES

DEBT CONSOLIDATORS/HELPERS/NEGOTIATORS/SETTLEMENT COMPANY

Stop Collectors

Upon filing bankruptcy, the Court orders all collection activity to stop. Creditors who do not abide by this Order are sanctioned by the Court.

No protection. The creditor may voluntarily stop collection for a period of time.

Repossession of Cars and Home Foreclosures

Chapter 13 allows you to catch up on delinquent payments and in some cases pay less then you owe, so you may keep your home and car. Chapter 7 allows the ability to pay the value of the property, not the total amount you owe, or maintain your original contract or jettison property you no longer want or can afford.

None. They can not help with secured debt.

Where do your payments go?

Your payment goes to a court-appointed Trustee who must maintain a performance bond, is regulary audited by the U.S. GOA and is overseen by the Office of the United States. Trustee making certain your money is paid to right parties, at the correct time.

Who knows? Anyone can advertise themselves as a Debt Helper and use company names, leading you to believe they are government approved. This is an unregulated area of business. If they advertise they are non-profit, it does not mean they are a charity. It only means the company spent all their funds on such things as salaries. The Texas Attorney General obtained temporary restraining order against "Foreclosure Assistance Solutions," a business offering to negotiate with mortgage companies for delinquent consumers. The company is charged with operating an unlawful scheme. More and more companies are expected to be caught by the Attorney General.

Credit Report

Creditors know upon Chapter 7 discharge, you have no other financial obligations, preventing you from paying new loans. During the Chapter 13 plan you can obtain reasonable, affordable and necessary new loans with Court approval.

The credit report will show the number of months you are delinquent for each creditor not paid. The farther behind on payments, the less likely you can obtain another loan and the lower your credit score.

Interest and Other Charges

Interest, late fees and overage charges on unsecured debt are all stopped upon filing bankruptcy. Interest on secured debt is usually moderated. Late fees and overage charges are stopped on secured debt.

No protection. You can only hope the creditors will work with you.

How much are the payments?

There are no negotiations with creditors. Your schedules determine the amount, if any, will be paid to creditors. You pay nothing under a Chapter 7 to unsecured creditors, where it is not abusive & have no excess income or property. All creditors under a Chapter 13, are paid from disposable income (the amount remaining after subtracting your budget from income). The unsecured creditors may only receive pennies on the dollar.

It is a gamble. Each lender has is own debt treatment policy. The Debt Helper can only guess if and for how much, and for how long or for what amount each creditor may accept.