Chapter 13 Bankruptcy vs. Debt Relief Companies

If you are in the unfortunate position of finding your debt getting out of hand, you may find yourself considering two entirely different options: bankruptcy and debt settlement. While on the surface debt settlement through a debt relief company may sound great, it is fraught with hidden perils that often remain unknown to consumers until it is too late. For this reason, you should always consult with a St. Petersburg debt relief attorney before engaging a debt relief company to help you manage your debts.

The Promise and Pitfalls of Debt Settlement

There are many companies out there that offer debt settlement. These companies, known as debt relief companies, often operate in a legal gray area. The debt relief companies make big promises, such as settling all of your debt for a fraction of the amount owed. While this seems great on the surface, there is more to it than simply paying and having the debt canceled. The debt relief company will ask you to make payments to it on a regular basis, and then they will use those funds to negotiate a settlement with your creditors and they will keep a portion of it as their fee. The debt relief company may encourage you to fall behind on your payments so that the creditor will consider you for a settlement. This is harmful to your credit score and credit report, as defaults can stay on your credit report for up to seven years. In the end, you may default on your debt and find that the creditor is unwilling to negotiate a settlement with you. Instead, the creditor may seek a court judgment permitting it to garnish your wages or place a lien on your property. Even if the debt relief company is successful in negotiating a settlement, your credit report will still reflect a charge-off or settlement for up to seven years.

A Better Alternative to Debt Settlement

A Chapter 13 bankruptcy is a legal remedy that can help you get your finances back on track. A Chapter 13 bankruptcy plan does not operate as a debt settlement. Instead, it is a repayment plan that allows you to make affordable payments to creditors over a period of three to five years. Common debts that can be included in a Chapter 13 plan include the following:

  • Credit card bills
  • Medical debt
  • Car loans
  • Personal loans
  • Utility bills
  • Past-due rent

This plan is proposed by you and your attorney, and if successful, will allow you to head off your debt before it spirals out of control. You can satisfy your debts without the risk of wage garnishment or property liens. Furthermore, depending on the amount of debt, a Chapter 13 bankruptcy is often a more economical option as all of your debt is taken care of in one go rather than piecemeal. Chapter 13 bankruptcy is also overseen by a court of law, so you can rest assured that attorneys offering Chapter 13 bankruptcy services are well-regulated, which cannot be said about debt relief companies.

Call the St. Petersburg firm of Berkowitz & Myer Today to Discuss Chapter 13 Bankruptcy

A Chapter 13 bankruptcy may very well be a better option for you than debt settlement if you are facing mounting debt. The attorneys at Berkowitz & Myer can advise you on all of your options and can determine whether a Chapter 13 bankruptcy is the right fit for you and your needs. Call the St. Petersburg law firm of Berkowitz & Myer today at (727) 344-0123 or contact us online to speak with an attorney about the solution to your debt.

When Is It Time to File for Chapter 13?

Filing for bankruptcyChapter 13 | St. Petersburg | Berkowitz & Myer is a big decision. A Chapter 13 can stay on your credit report for seven years and can make financing harder to obtain and raise your interest rates. That said, you may enjoy significant benefits to filing for bankruptcy, such as avoiding foreclosure, lowering monthly payments, and discharging certain debts.

Consumers sometimes find filing for Chapter 13 a difficult decision. They may (sometimes correctly) believe that they are only experiencing temporary financial problems or feel that filing for bankruptcy somehow means they have failed.

Speak to an attorney about your optionswhich may or may not include filing for bankruptcy. To schedule a free consultation with an experienced bankruptcy lawyer in St. Petersburg, call Berkowitz & Myer today at (727) 344-0123 or contact us online.

Deciding to File for Chapter 13: Factors to Consider

Whether filing for bankruptcy makes sense depends on numerous factors, including:

  • The nature of your debt
  • Whether you have a property you want to keep
  • Your income
  • the total amount of debt
  • financial goals

When a person files for Chapter 7 the most common form of consumer bankruptcymost, if not all, of debts are discharged without having to make any payments. The major downside of Chapter 7, however, is that the bankruptcy trustee will sell all of a debtors non-exempt assets and use proceeds of the sale to pay off creditors before granting a discharge.

Unlike in Chapter 7, a Chapter 13 bankruptcy allows filers to keep their property while making payments on their debts. For this reason, many people who own homes or other significant assets pursue Chapter 13 rather than Chapter 7 bankruptcies.

A Lawyer Can Help You Navigate the Process

As the information above should make clear, you must consider many issues when deciding whether to file for bankruptcy. An attorney familiar with the different types of bankruptcy may analyze your financial situation and determine whether filing for bankruptcy is in your best interest. If it is, your lawyer can also help you determine which type of bankruptcy is right for you. Always talk to a lawyer before making any firm decisions with respect to bankruptcy.

Call Our Office Today to Speak with a St. Petersburg Bankruptcy Attorney

If you are considering filing for Chapter 13 bankruptcy but dont know if its the right thing to do, or the right time, speak to a lawyer as soon as you can. At Berkowitz & Myer, we will thoroughly review your financial situation and determine whether you would benefit from Chapter 13 or some other type of bankruptcy. If filing isnt right for you, we will let you know and not charge you anything for your visit. To schedule your free consultation with one of our lawyers, call (727) 344-0123 or send us an email through our online contact form.

Filing for Chapter 13 Will Not Ruin Your Life

Bankruptcy Lawyer St. PetersburgIf you, like many people, experience financial problems, you’re not sure what to do or where to turn. You’re aware that you can’t keep up with your monthly obligations but are worried about the ramifications of filing for Chapter 13. You may have heard that bankruptcy will stay on your credit report for 10 years and make it impossible to buy a house, finance a car, or even get a credit card.

Many “disadvantages” of bankruptcy, however, are actually myths. For most filers, the benefits of bankruptcy significantly outweigh the actual downsides.

If you’re having trouble keeping up with your bills each month or are deeply in debt, discuss your options with an experienced attorney. For a free consultation with a St. Petersburg bankruptcy lawyer, call Berkowitz & Myer today or contact us online.

The Basics of Chapter 13 Bankruptcy

To understand how Chapter 13 can benefit you, it helps to understand exactly what bankruptcy entails. Fundamentally, Chapter 13 allows consumers to reorganize their debts in a way that allows them to make affordable monthly payments until they have paid back as much of their debt as the law requires.

In Chapter 13, you propose a three to five year repayment plan that takes into account your allowable monthly expenses. During the time that you make payments, bankruptcy protects you from any collection activity from creditors, including foreclosure, repossession, and lawsuits. Chapter 13 bankruptcy, then, can help people keep their property while paying down their debt.

What If I Am Behind on My Mortgage?

If you are behind on your mortgage payments and facing foreclosure, filing for bankruptcy will not lower your mortgage payments. That said, it will allow you to take the amount you are behind on your mortgage (the “arrears”) and pay it back during the course of your bankruptcy repayment plan. As a result, if you want to stay in your home, you still must afford your monthly mortgage payments while you are in bankruptcy. If you simply cannot afford your mortgage payments, look into other options.

Call Us Today to Speak With a Chapter 13 Bankruptcy Lawyer in St. Petersburg

If you have financial problems and don’t see a way out, discuss your situation with an experienced lawyer as soon as you can. In many cases, filing for bankruptcy can help you improve your financial situation and reduce or even eliminate debt—all while keeping important property like your home and car. To schedule a free case evaluation with an attorney, call Berkowitz & Myer today at (727) 344-0123 or send us an email through our online contact form.

Is Chapter 13 Bankruptcy Right for You?

Bankruptcy Lawyer St. PetersburgMaybe you’ve lost your job, gone through a divorce, or experienced some other life-changing event that has left you struggling to stay on top of your finances. After exhausting every option, bankruptcy may feel like your last remaining option, but you don’t want to lose all of your possessions. You may want to consider filing for Chapter 13 bankruptcy—a type of bankruptcy that allows you to enter into a long-term payment plan that will allow you to pay your debts and retain your property.

However, Chapter 13 bankruptcy is not for everyone, depending on your financial situation and your goals. In addition, the law has certain requirements that you must meet to qualify for Chapter 13 bankruptcy.

The following questions will help you determine whether Chapter 13 bankruptcy is right for you.

Do you want to keep your property?

Chapter 13 is an attractive option for people who want to keep their homes. That includes their cars or any other property they’ve financed, even if they are behind on payments. Once you file for bankruptcy, the balance due on the loan eventually becomes a part of the repayment plan. That plan can be for as long as five years. Provided that you comply with the terms of the payment plan and any other requirements, you will get to keep your property.

On the other hand, maybe you don’t want to keep your property. For example, if you cannot afford your monthly mortgage payment. That also includes if you still owe money on a car that needs significant repairs. Do you owe a lot of money on property that you no longer want or need? Chapter 13 may not be the best choice for you.

Can you actually keep up with your bills?

In a Chapter 13 bankruptcy, you will enter into a payment plan for all of your debts that came due before you filed for bankruptcy. However, you will also need to continue paying your recurring monthly expenses as they come due. As a result, you will need to cover your monthly expenses, plus make payments toward your Chapter 13 payment plan.

Therefore, to answer this question you need to be brutally honest with yourself. Tally up your monthly household expenses—car payments, rent or mortgage payments, groceries, utilities, clothing, entertainment, etc. Then decide which of those expenses you could realistically do without for the foreseeable future. Compare your expenses against your current monthly income. If you can pay your expenses with money left over, then Chapter 13 bankruptcy may prove a viable option for you.

If you can’t pay your monthly expenses, you may not qualify for Chapter 13. With that the court won’t approve your payment plan. In these cases, you may still have Chapter 7 as a viable option.

Do you earn a regular income?

You have to earn regular income to fund a Chapter 13 payment plan, and the court will not approve your plan unless you have demonstrated an ability to make the payments. Obviously, a steady paycheck as an hourly or salaried employee is the easiest way to demonstrate your ability to make payments. That said, you may qualify even if you work on commission or by project, provided that you can submit documentation showing your average income during the last several months. If, however, you are unemployed, you may not file for Chapter 13 bankruptcy.

What kind of debts do you have?

Some debts are dischargeable in a Chapter 13 bankruptcy that are not dischargeable in Chapter 7. For example, marital debts arising from a divorce, debts from loans on a retirement plan, or debts incurred to pay a nondischargeable tax debt are all dischargeable in Chapter 13 bankruptcy. Unfortunately, student loan debt is almost impossible to discharge in either Chapter 7 or Chapter 13.

Contact a Saint Petersburg Bankruptcy Attorney to Discuss Whether Chapter 13 Bankruptcy Can Help You

The attorneys at Berkowitz & Myer focus on bankruptcy law and can help you decide how to proceed. Call us today at (727) 344-0123 or contact us via email to schedule your free consultation.

How Chapter 13 Bankruptcy Can Help Alleviate Financial Stress

Bankruptcy Lawyer St. PetersburgThe decision to file for bankruptcy can overwhelm anyone. Not only are you dealing with aggressive creditors and possible legal action, but you’re also trying to make the right financial decisions for you and your family’s future. In the thick of things, bankruptcy can feel like yet another impossible mountain to climb. However, Chapter 13 bankruptcy can actually help relieve your financial stress and reduce your anxiety.

Halt the Collection Process with Chapter 13 Bankruptcy

The biggest benefit of filing for bankruptcy is that your creditors are legally prohibited from pursuing you once you file, provided that you comply with the court’s requirements. This means that your creditors have to stop calling you and it puts any pending legal action (primarily lawsuits or garnishments) on hold.

Repay What You Owe 

Contrary to popular belief, most people who file for bankruptcy actually want to pay their debts. The problem is that they can’t, especially once the interest, late fees, and other penalties start to accrue. By filing for bankruptcy, you can stop those debts from growing, and work out a plan to repay your debts. Chapter 13 bankruptcy provides a viable, realistic plan for repaying your debts. Once they complete the payment plan, many people feel a deep sense of satisfaction. That’s from knowing that they have honored their obligations.

Reduce Your Payments

When you file for Chapter 13 bankruptcy, the court will want you to disclose all the debts you have, your monthly income, and any other financial obligations. Working with your attorney and the bankruptcy trustee, you will then propose a payment plan. Part of this process may include reducing your creditors’ claims against you. The ultimate objective of the plan is to repay your debts on terms that you can afford. You can take as long as five years to make payment in full. As a result, you will have much lower monthly payments than you have now.

Reduce the Number of People You Have to Pay

The Chapter 13 payment plan does not require you to negotiate with and then pay each of your creditors individually. Once the court approves the payment plan, you will then make your payments to the court. The court will then disburse payments to those creditors according to your payment plan. In the end, you wind up writing far fewer checks. That means that you don’t have to stay on top of multiple payment plans. As long as you stay current on your payments into the court.

Keep Your Property

Another benefit of Chapter 13 bankruptcy is that you may keep your property, such as your house and your car. You will need to keep up with your payments and comply with the court’s requirements. If you do, you won’t lose these assets to repossession or foreclosure.

Discharge

In addition to the Chapter 13 payment plan, the other objective of filing for bankruptcy is to obtain a discharge of your debts. If your creditors were properly notified of your bankruptcy, you are no longer personally liable for the debts that arose before you filed for bankruptcy.

Contact a St. Petersburg Bankruptcy Attorney to Discuss Your Options

If you are facing multiple collection actions and considering filing for bankruptcy, an experienced bankruptcy attorney can help you understand your options. To schedule a free consultation with one of the lawyers at Berkowitz & Myer, call us at (727) 344-0123 or send us an email through our online contact form.

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