Why Chapter 13 is Better Than Debt Management Programs
Do you need to restructure your debts and make your payments more affordable?
If you’re pondering whether to utilize a Debt Management Program (DMP) or file for Chapter 13 bankruptcy, consider the following: Many credit-counseling agencies have pre-arranged terms with credit card companies for repayment. The interest rate may be reduced, but there will still be interest to pay.
Filing for Chapter 13 bankruptcy enables the debtor to pay off debts with zero percent interest and provides a legal means to eliminate debt. Income left over after reasonable family expenses goes toward paying off your debts. Anything that can’t be paid will be eliminated or discharged.
DMP’s are dependent upon all creditors agreeing to the plan. If just one balks, it may throw a monkey wrench into the whole plan.
Once approved by the Court, creditors must accept your proposed repayment plan. You pay them on your terms, not theirs.
Most DMPs establish a budget and monthly payment amount. By the time arrangements are worked out with creditors, you might wind up having reports of late payment going to the credit-rating agencies, tarnishing your credit. Some creditors may seek wage garnishment to speed up repayment. If they succeed, other important budget items may suffer.
Chapter 13 protects you from wage garnishments and from late reporting to credit-rating agencies. Terms of repayment are worked out between your attorney and the bankruptcy court.
DMP creditor arrangements are voluntary and rely on the good faith of the creditors, who are free to change the rules in the middle of the game.
Chapter 13 provides a consistent set of rules and legal protection from all creditors. Harassing phone calls and letters, vehicle repossession, home foreclosure, and utility shut-offs are all off limits.
Chapter 13 is a tool to help someone regain secure financial footing, not a sign of financial failure. Talk to an experienced bankruptcy attorney to go over your options.
Ray J. Bulaon is a debt and tax resolution attorney in Valencia who has helped more than 5,000 clients. For a free confidential consultation, call his Valencia office at 866-477-7772.
ADVERTISE WITH US
Hearing Loss Statistics At A Glance – Audiology Associates
Hearing loss is the third most common chronic physical condition behind arthritis and heart disease, affecting people of all ages. It is especially common among older adults and veterans.According to the Centers for Disease Control and Prevention and the Hearing Loss...
Embrace Holistic Healing With Our Intensive Outpatient Program (IOP) for Substance Abuse and Addiction – New U Therapy Center
Substance abuse can feel like being trapped in a never-ending cycle of despair, isolation, and uncertainty. It’s a relentless struggle that can consume every aspect of one’s life, leaving people feeling lost, hopeless, and alone.We understand the toll substance abuse...
Heel and Arch Pain – Valencia Foot and Ankle Center
Heel/Arch pain is one of the most common foot ailments affecting millions of people on a daily basis. Unfortunately, this affliction is left untreated by a majority of the population, figuring that it will go away, or accepting that the pain is typical with...
ABOUT THE MAGAZINE
Santa Clarita Magazine has set a high standard for excellence in advertising for over 34 years. A family owned and operated business, Santa Clarita Magazine has grown with the Santa Clarita Valley since 1990 and become the #1 place to advertise locally.
FOLLOW US
SANTA CLARITA MAGAZINE
PO Box 801570
Valencia Ca 91380
For Advertising information
Call or Text: 1 (661) 294-4444