Debt Repayment Plan Questions
What are other options besides Bankruptcy for an individual that is in debt?Outside of Bankruptcy, an individual who is in debt may be able to enter into a Debt Repayment Plan. There are several non-profit companies that are able to consolidate an individual’s debt into one monthly payment that the individual will be able to afford.
Is there a major difference between Chapter 7 and Chapter 13 Bankruptcy?Yes there is a major difference between the two. Chapter 7 Bankruptcy discharges the debts, except for a few things that are not dischargeable, so that the debtor no longer is responsible for these debts. To file Chapter 7 an individual must also pass the means test. Chapter 13 is a Debt Repayment Plan. The Chapter 13 Debt Repayment Plan is a plan that is made by the trustee to help the debtor repay their debts over a period of three to five years. But the individual must be able to meet the requirements as well as be able to make the payments.
Which is better filing chapter 13 Bankruptcy or doing a Debt Repayment Plan through a consolidation company?For most individuals it is more favorable to file Chapter 13 Bankruptcy than to enter into a Debt Repayment Plan with a consolidation company. Chapter 13 is also considered a Debt Repayment Plan, but the totals that the individual pays back are usually lower. Another major plus with Chapter 13 is that the creditors are bound to cooperate, where with a Debt Consolidation Company they do not have to cooperate and participate if they do not want to. A good thing for a person to remember though is that when it comes to student loans, neither of the two will be able to offer assistance.
Where do domestic support obligations fit into a Chapter 13 Bankruptcy?Since Chapter 13 Bankruptcy is a Debt Repayment Plan, and Domestic Support obligations cannot be discharged, the Domestic Support obligations are to be considered part of the Debt Repayment Plan. The domestic support obligations must be cured and paid near the beginning of the case.
If a person wants to take care of their debt by doing a Debt Repayment Plan, they have a couple of options. They can file Chapter 13 Bankruptcy or they can get a hold of a Debt Consolidation Company. Chapter 13 Bankruptcy is considered a Debt Repayment Plan that the individual must pay back the debts over a period of three to five years. There are pro and cons to each option, one pro for Chapter 13 Bankruptcy is that creditors have to cooperate with the Chapter 13. It should be noted that neither a Debt Repayment Plan nor a Chapter 13 Bankruptcy filing can discharge student loans.