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Filing for Chapter 13 Bankruptcy vs. Debt Consolidation

Written by Wesley Scott | January 4, 2017 at 3:00 PM

Struggling with credit card debt is stressful and confusing. But it doesn’t have to be. There are options to consolidate your debt, including filing for Chapter 13 Bankruptcy. Why choose Chapter 13 over hiring a debt consolidation company? Chapter 13 allows you to put you and your family ahead of the creditors.

When working with a debt consolidation company, you pay them. They set up a repayment plan and collect a percentage as payment for their services. So you’re paying all of the debt and then some. When finances are already tight, why add to it?

By filing for Chapter 13 bankruptcy, you work with your lawyer to set up a repayment plan and the creditors cannot harass you while you are working towards financial freedom. A repayment schedule is set up and payments are based on what you can afford. Chapter 13 is here to help you, it’s about you. After a specified period of time, the remaining debt is wiped out. Forever. Tax free.

Still not sure? Consider this hypothetical. Let’s say you have $50,000 in credit card debt. You set up a plan with a debt consolidation company to pay the debt off over five years (if you’re lucky). The company collects 5% as their fee for helping you. In this situation, you would be paying $875 every month for five years. That’s a total of $52,500!

Now let’s take this hypothetical debt and try filing for Chapter 13 Bankruptcy. Again, you have $50,000 in credit card debt. You and your lawyer have worked together to set up a payment plan of $200 each month for five years. By the end of this time period, you will have paid $12,000. What happens to the other $38,000? It’s gone. Wiped out. Forever.

So let’s focus on you, not the creditors. Would you feel less stressed tonight if you resolved your debt? If you could focus on your family and not the creditors, how would your life be different? Join the thousands of people that we’ve helped over the years get a fresh start, by doing what they did first. They called us. Let’s set up a free initial consultation, the first step in getting you back to financial freedom.