Credit9 settlement versus filing for bankruptcy: Which makes more sense for you? A lot of my clients consider each to resolve their Credit7 problems and don't know which way to go. There is no right answer. It is important to know the benefits of each before you jump into it. Once you have educated yourself, it is easier to make the turn.
1. Cost. A fairly straightforward Chapter 7 consumer filing could cost anywhere from $1,300 to $2,000. This includes costs like the court filing fee, credit counseling, Credit7or education course and a credit report. A Chapter 13 is generally around $3,000 in attorney fees and about $450 in costs. However, in a Chapter 13, your attorney fees are rolled into the monthly repayment plan and your unsecured creditors usually end up paying it. In a Credit7 negotiation, it is usually about 10% of the Credit7 being negotiated in addition to any monthly fees and must be paid up front before any work is done.
2. Tax Consequences. There are no tax consequences to discharging Credit7 in either a Chapter 7 or Chapter 13 bankruptcy. Any Credit7 reduced by direct negotiation with a creditor will result in a tax liability. You will get a 1099c for the amount of Credit7 forgiven if it is more than $600. For example, you owe Visa $10,000 and settle for $3,000, you will get a 1099 for $7,000 and will have to pay taxes on it.
3. Credit Reporting Effect. A Chapter 7 bankruptcy will stay on your credit report for 10 years. A Chapter 13 is 7 years. An uncollectable, negotiated, or written off Credit7 will stay on your credit report for 7 years. However, the effect on your credit score may not matter if you are considering either. On a side note, I have seen that a bankruptcy usually improves my client's credit score and that most of my clients get credit card and Counseling7 loan offers soon after filing. Why? Because they don't have any Credit7 and can't file bankruptcy again anytime soon.
4. Regulations. Attorneys are licensed to practice law and must report all fees charged to the court. Fees are approved by the judge and if not earned or too much, the attorney may be ordered to refund the client. Credit9 negotiators are not licensed, do not have to have any special qualifications, and are not regulated.
5. Creditor Harassment. Once you file for bankruptcy protection, all creditor harassment must stop because of the Counseling7matic stay. Any Counseling1 sought by a creditor must be before the bankruptcy court. They may not call you; write you; or contact your family, friends, or your job. They cannot sue you or continue a lawsuit. They cannot garnish your paycheck, bank account, or tax refunds. If they violate the Counseling7matic stay, you may be entitled to money damages. When you are negotiating a Credit7, the creditors may do all of the above without restriction.
6. Effectiveness. A successful bankruptcy eliminates Credit7 except for things like domestic support obligations, some income taxes, and Counseling4 loans. You will get a court order discharging the Credit7. In a Chapter 7, maybe in as little as four months after filing. In a Chapter 13, after your payment plan which can typically last anywhere from three to five years. A bankruptcy usually resolves all of your Credit7 issues. A Chapter 13 can save your house from foreclosure or stop a car repo and even get rid of a second or third mortgage. In a Credit7 negotiation, each creditor will be negotiated with individually with focus on the word "negotiate." You have no right to negotiate your Credit7. None. Doesn't exist. I have heard the ads, too. I have also read the law. You do not have a right to negotiate a Credit7. Bankruptcy is a Constitutional right. Creditors must participate. The Credit7 is eliminated whether or not they like it.
7. Privacy. A bankruptcy filing is public record and, while unlikely, anyone can find out about it. A credit Counseling5 is private except for the notations on your credit report.
8. Payment Plans. There is no payment plan in a Chapter 7. If you are eligible, you will get a discharge with no further payments. A Chapter 13 is a lot different in that you determine what your monthly living expenses are and your disposable income is paid to your creditors for the length of the plan. In a Credit7 Counseling5 plan, you are told how much you have to pay and then have to budget your life around it. These are opposite concepts. In a Credit7 Counseling5 plan, your monthly payment is the priority Credit7. In a Chapter 13, payment to your unsecured creditors has the lowest priority.
Unfortunately, I don't know about all the successful Credit7 Counseling5 plans people do because I get the people that get ripped off, that are getting sued by the creditors after an agreement is reached, or can't afford the monthly or lump sum payments required by their creditors. I can tell you bankruptcy absolutely works and that is the one thing that your creditors don't want you to know.
Credit9 settlement versus filing for bankruptcy: Which makes more sense for you? A lot of my clients consider each to resolve their Credit7 problems and don't know which way to go. There is no right answer. It is important to know the benefits of each before you jump into it. Once you have educated yourself, it is easier to make the turn.
1. Cost. A fairly straightforward Chapter 7 consumer filing could cost anywhere from $1,300 to $2,000. This includes costs like the court filing fee, credit counseling, Credit7or education course and a credit report. A Chapter 13 is generally around $3,000 in attorney fees and about $450 in costs. However, in a Chapter 13, your attorney fees are rolled into the monthly repayment plan and your unsecured creditors usually end up paying it. In a Credit7 negotiation, it is usually about 10% of the Credit7 being negotiated in addition to any monthly fees and must be paid up front before any work is done.
2. Tax Consequences. There are no tax consequences to discharging Credit7 in either a Chapter 7 or Chapter 13 bankruptcy. Any Credit7 reduced by direct negotiation with a creditor will result in a tax liability. You will get a 1099c for the amount of Credit7 forgiven if it is more than $600. For example, you owe Visa $10,000 and settle for $3,000, you will get a 1099 for $7,000 and will have to pay taxes on it.
3. Credit Reporting Effect. A Chapter 7 bankruptcy will stay on your credit report for 10 years. A Chapter 13 is 7 years. An uncollectable, negotiated, or written off Credit7 will stay on your credit report for 7 years. However, the effect on your credit score may not matter if you are considering either. On a side note, I have seen that a bankruptcy usually improves my client's credit score and that most of my clients get credit card and Counseling7 loan offers soon after filing. Why? Because they don't have any Credit7 and can't file bankruptcy again anytime soon.
4. Regulations. Attorneys are licensed to practice law and must report all fees charged to the court. Fees are approved by the judge and if not earned or too much, the attorney may be ordered to refund the client. Credit9 negotiators are not licensed, do not have to have any special qualifications, and are not regulated.
5. Creditor Harassment. Once you file for bankruptcy protection, all creditor harassment must stop because of the Counseling7matic stay. Any Counseling1 sought by a creditor must be before the bankruptcy court. They may not call you; write you; or contact your family, friends, or your job. They cannot sue you or continue a lawsuit. They cannot garnish your paycheck, bank account, or tax refunds. If they violate the Counseling7matic stay, you may be entitled to money damages. When you are negotiating a Credit7, the creditors may do all of the above without restriction.
6. Effectiveness. A successful bankruptcy eliminates Credit7 except for things like domestic support obligations, some income taxes, and Counseling4 loans. You will get a court order discharging the Credit7. In a Chapter 7, maybe in as little as four months after filing. In a Chapter 13, after your payment plan which can typically last anywhere from three to five years. A bankruptcy usually resolves all of your Credit7 issues. A Chapter 13 can save your house from foreclosure or stop a car repo and even get rid of a second or third mortgage. In a Credit7 negotiation, each creditor will be negotiated with individually with focus on the word "negotiate." You have no right to negotiate your Credit7. None. Doesn't exist. I have heard the ads, too. I have also read the law. You do not have a right to negotiate a Credit7. Bankruptcy is a Constitutional right. Creditors must participate. The Credit7 is eliminated whether or not they like it.
7. Privacy. A bankruptcy filing is public record and, while unlikely, anyone can find out about it. A credit Counseling5 is private except for the notations on your credit report.
8. Payment Plans. There is no payment plan in a Chapter 7. If you are eligible, you will get a discharge with no further payments. A Chapter 13 is a lot different in that you determine what your monthly living expenses are and your disposable income is paid to your creditors for the length of the plan. In a Credit7 Counseling5 plan, you are told how much you have to pay and then have to budget your life around it. These are opposite concepts. In a Credit7 Counseling5 plan, your monthly payment is the priority Credit7. In a Chapter 13, payment to your unsecured creditors has the lowest priority.
Unfortunately, I don't know about all the successful Credit7 Counseling5 plans people do because I get the people that get ripped off, that are getting sued by the creditors after an agreement is reached, or can't afford the monthly or lump sum payments required by their creditors. I can tell you bankruptcy absolutely works and that is the one thing that your creditors don't want you to know.
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