|
Perspective on Bankruptcy bill 
Books on bankruptcy
|
Chapter 13: Court sponsored debt management programAds abound for "debt management", "debt consolidation", "credit counseling", all playing into the stress that the financially over- committed experience and their sincere desire to pay back their debts, if they could get reasonable terms. Debt repayment, without the need to negotiate with your creditors or pay another entity, is available in Chapter 13. It comes without the pitfalls of out-of-court programs and is enforced by a federal judge. Its cost is the court's filing fee; your attorneys fees as allowed by the judge; and the trustee's commission. Chapter 13 requires creditors
No creditor can refuse to go along with a confirmed plan. Chapter 13 plan payments are based on what is available in the debtor's budget after reasonable living expenses. Some "debt consolidation" plans advertised on TV provide that half of the debtor's take home goes to the consolidator. Some such programs are outright scams. Most fail. The "set up fee" in bankruptcy, if you will, is the court's filing fee of $274. The ongoing cost is the commission of the trustee, calculated at a percentage of the payments you make to the plan, usually between 4 and 10%. At the end of the plan, the dischargeable debt is no longer enforceable. Better still, there are no tax consequences to the cancellation of debt in bankruptcy, as there are in debt management programs. More on Chapter 13
1674 N. Shoreline Blvd. Suite 140 Mt. View CA 650-694
4700 Founding member of the BankruptcyLawNetwork- Real Lawyers Real Solutions |