Bankruptcy vs debt consolidation, which one is right for your current debt problems?

If you’re considering filing for bankruptcy, you need to know the difference between Chapter 7 and Chapter 13. Virginia bankruptcy services can help answer questions on each chapter filing.

With the deteriorating state of the economy, ads for debt consolidation are popping up everywhere. You see them on television, on the internet, even on the spine of the telephone directory. Debt is a huge problem, and more and more folks are looking for help in straightening out their financial situations.

In Chapter 13 bankruptcy, a person s debt is reorganized for repayment. To be eligible for this type of bankruptcy, you must have a steady source of income from which you can make monthly payments to your creditors for the next 3 to 5 years. How much you have to pay back and what your monthly payments will be are determined by the bankruptcy court and based on things like how much money you owe, how much money your creditors would have received had you filed Chapter 7 bankruptcy, and how much you can afford to pay per month.

When someone files a Chapter 13, it means that they are not able to repay their debt obligations as they originally agreed to do when the debt was taken on. Chapter 13 bankruptcy law allows for these debts to be reorganized for the purpose of repayment. This is different than a Chapter 7 bankruptcy, in which the debts are discharged immediately instead of being set up with a repayment schedule.

Chapter 13 Bankruptcy is a legal process that differs from traditional debt consolidation in certain important ways. This article details some of the most significant differences. While a Chapter 13 bankruptcy is actually a type of debt consolidation, it differs from traditional debt consolidation in certain important legal aspects. The most glaring and important difference is the power it wields. Backing up Chapter 13 bankruptcy is the Federal Bankruptcy Code, which can be a huge advantage when you are needing relief from debt.