Because a Centennial or Aurora Chapter 13 bankruptcy requires a repayment plan, I am often asked if it is a better idea just to go through a debt consolidation. My advice is always to go with the bankruptcy, and I will explain why it is the better choice through this blog.
Uncertainty with Debt Consolidation: Go for the Sure Thing – Denver Chapter 13 Bankruptcy
When a bankruptcy court judge orders a Chapter 13 bankruptcy, the creditors involved are required to accept the ordered payment plan. There are no more negotiations involved: what the courts says, goes. For debt consolidation, you must negotiate directly with each creditor – and they do not have to negotiate lower payments or any debt forgiveness. Since the negotiations are voluntary, the creditor can change their mind at any time, and changing the agreement back to the former arrangement – which was causing financial problems to begin with. There are also certain companies that will never allow payments under debt consolidation.
No Limit on Debt Consolidation Payments: Specific Payment Time-frames with Chapter 13 Bankruptcy
Even if a company chooses to negotiate a debt consolidation payment, there is no limit on the amount of time a person will have to make the consolidated debt payments. In actuality, you could be making these payments for decades trying to pay down the debts. With a Chapter 13 bankruptcy, you will only be required to make payments for a very specific amount of time. As long as you meet all the payments and complete the plan as required, the remainder of your debt will be discharged. Basically, with bankruptcy you can pay back a portion and then the slate is wiped clean, or you can continue to make payments indefinitely with debt consolidation. Doesn’t sound like a difficult choice to me.
Filing Chapter 13 Bankruptcy in Littleton: A Less Expensive Choice that Debt Consolidation
While the fees involved with hiring an experienced Littleton and Denver bankruptcy attorney and filing fees owed to the court may seem high, debt consolidation is usually far more expensive. Debt consolidation companies include high interest and penalties with your monthly payment. The payment plan ordered by the court in a Chapter 13 bankruptcy is the final amount you will have to pay – no added interest or penalties to weigh you down.
If you are in debt and would like more information about how a Chapter 13 bankruptcy would benefit you, contact expert bankruptcy attorney Barry Arrington at 303-205-7870 to begin your journey towards financial freedom.