April 2, 2009
While searching the internet on “Bankruptcy v. Debt Reduction Programs”, I found a site called Debt Consolidation Care ww.debtconsolidationcare.com. There were a number of interesting posts under http://tinyurl.com/ctt7b9. In reading these stories I am reminded of my client who had already started with a Debt Reduction Program. Some of the stories echo the issues or problems I mention in my post Bankruptcy v. Debt Reduction Programs http://tinyurl.com/cpxnra.
One of the post has a family who has started a reduction/consolidation plan, has paid money, had some success, yet was left to fight the court battles on their own. They had not completed the program and were now wondering about bankruptcy. The problem here is bankruptcy should have been considered more heavily before they agreed to a debt consolidation or reduction plan. They have expended hard earned money for the opportunity to fight their own legal battles. There definately is a stigma and much misunderstanding associated with bankruptcy, but I believe it is the best weapon or shield most people have for finding debt relief.
Other posts on the site mention how they have talked to an attorney and Chapter 7 will not work because their income is too great so Chapter 13 is their option. They don’t like Chapter 13 because they are under the assumption that they will have to pay “all” their debts. This is not true. The goal of Chapter 13 is to bring secured creditors current while paying unsecured creditors a percentage. Yes you may have to give up, liquidate, some of your luxury or excess property in order to help pay some of your creditors. If you read any of Liz Pulliam Weston’s books, you will see that she promotes this concept. She mentions many times that one alternative to finding cash to help pay down debt is to “have a garage sale”. Sell some of the property that you do not need, even boats and additional autos. We have to take control of our finances. Either do it yourself if you are not too far in debt, or seek help. Bankruptcy may be your best option because it will be handled through the court system, your collection actions will cease, you will know how much you need to expend, and you can quickly begin rebuilding your credit.
Best of Luck.
Jeff Jackson, Bankruptcy Attorney, Central Ohio
I provide Debt Relief. I help people file for relief under the Bankruptcy Code.