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

How will the Bankruptcy Reform laws of 2005 affect your bankruptcy? Consulting with an informed Washington DC bankruptcy lawyer should get your questions answered.

Nick Messe | Bankruptcy Basics

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.

Rick Hendershot | Chapter 13 Bankruptcy, Debt Consolidation

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.

Ranju Kumar | Chapter 13 Bankruptcy

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.

Contributed Content | Chapter 13 Bankruptcy

Laws are ever-changing. Now consumers willing to file for Chapter 7 have certain salary caps. For you to be eligible for this chapter, your monthly income should be equal or lower to the median monthly income for your family size set by each state. This seeks to limit high income families to file for this type of chapter. This test is called “the means test”. Chapter 13 has also been altered. This change only applies if the filer’s income is higher than their state’s median. Additionally, these expenses will not be deducted from the monthly income, but from the average monthly income during the subsequent six months after filing for chapter 13 bankruptcy.

Lara Sawyer | Bankruptcy Basics