As a consumer, there are several bankruptcy debt relief options available. The first is Chapter 13 bankruptcy debt consolidation. This is a voluntary repayment plan. Usually with debt consolidation, this form of debt relief involves consolidating your debts and sometimes it is possible to actually reduce the amount of interest you are paying to your credit card companies. (see credit card debt bankruptcy).
If you are thinking about possibly filing for bankruptcy or are considering your options, you may want to consider the fact that debt relief, unlike bankruptcy, is a voluntary process and requires the cooperation of your creditors. In addition, if a voluntary debt relief plan is entered into, you must pay the monthly consolidated payment as well as the fees to the company for administering the voluntary repayment plan.
It is strongly recommended that if you choose the debt relief option without filing for chapter 7 bankruptcy that you perform a background check on the company you have retained. Unfortunately, many debt relief companies oftentimes end up in a bankruptcy proceeding themselves, or, worse yet, the company defrauds consumers. So, as the saying goes, buyer beware.
If you are considering filing for debt relief bankruptcy voluntarily, please take into account that most of these debt relief plans fail. Similarly, the statistics show that most Chapter 13 bankruptcy cases fail at the approximate rate of 75%. That is, even if you file for Chapter 13 bankruptcy, there is a 75% chance that the plan will fail and you will end up in a Chapter 7 bankruptcy, which is a total liquidation bankruptcy.
Chapter 7 bankruptcy is also commonly known as fresh start bankruptcy. Bankruptcy statistics show that approximately sixty-five percent 65% of all bankruptcies filed in the United States are Chapter 7 bankruptcy cases. If you meet the legal requirements, and the court grants a Chapter 7 bankruptcy discharge, then most, if not all, of your debts will be legally wiped out.
Should you choose to enter into a bankruptcy debt relief consolidation plan, you should also consider or beware that some companies will charge exorbitant monthly fees for entering into a bankruptcy debt relief consolidation repayment plan. You should request from any debt relief company you are considering retaining that they send you free information about services they provide without mandating that you make available to them private credit card information such as account numbers and current balances.
A red flag should go up if any bankruptcy debt relief company demands that you make them payment before any bankruptcy debt relief consolidation plan has been approved by your creditors. Furthermore, any bankruptcy debt relief lawyer should offer as part of his/her services a free analysis of your particular situation.
Don’t be pressured into making so-called “voluntary” contributions to a debt relief company, or, that you are enrolled in a debt relief repayment agreement without first having obtained credit counseling by an experienced counselor.
If you are considering all of your debt relief options, Chapter 7 bankruptcy offers an attractive option in the correct circumstances. It is not an appropriate remedy for each situation, so it is advisable that you speak to both a debt relief agent and a bankruptcy attorney so that your options can be professionally evaluated.