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 Posted: Thu Apr 20, 2006 8:42 am |
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Can someone please Explain to me the difference between Chapter 7 and Chapter 13?
Would appreciate any help or input. I'm up in the air with an $8000 debt that went to an Attorney. No consolidation company I've talked to has been able to help. I registered here and they can't help either. I don't have the money to settle or pay in full and the Law Firm Wont take Monthly payments. They said they are going to sue, they will not work with my budget.
The Debt is not within the SOL so they can sue at any time. The Law Firm is very aggressive and Rude.
I am running out of options with this so I'm getting desperate. I Barely have money to make it on a day to day basis, hiring an Attorney myself just isn't possible. This is the first time this has happend & I don't know what to do.
Would appreciate any help or info.
Thanks[/b]
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rlrain
Joined: 18 Apr 2006
Posts: 13
Debtcc Points: 468
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| Posted: Thu Apr 20, 2006 8:44 am |
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Have you been served by the court?
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jmid1969
Joined: 30 Mar 2006
Posts: 102
Location: NJ Debtcc Points: 1512
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| Posted: Thu Apr 20, 2006 9:10 am |
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if they take you to court, the judge can force them to accept payments. And with new bankruptcy rules that went into effect 10/05, you have to attempt 6 months of a credit counseling service before you can file.
The big difference between the two types of bankruptcy is that chapter 7 is more of a "clean slate" approach, and chapter 13 is a a debt reorganization. There is a means test applied to see if you qualify to have the debt absolved by ch. 7; if not, then a payment plan is set up by the courts.
Good luck! You might want to make an appt with an attorney, for the free initial consulation, to get more in-depth information that is specific to your situation.
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set4sail
Joined: 03 Jun 2005
Posts: 418
Debtcc Points: 7616
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| Posted: Thu Apr 20, 2006 10:15 am |
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Hi rlrain,
It may help you!
In chapter 7, most of your debts like credit card debt, unsecured debt will be eliminated and you will be free from your creditor's harassment. But it is not easy to quality for chapter 7 bankruptcy. You have to prove before the court that you don't have enough money to pay your creditors as well as to maintain regular living expenses.
In chapter 13, actually it is a plan to repayment your debts. The bankruptcy debtor will pay his monthly payment to the Trustee of chapter 13 from whom the creditors will receive their payment. The court will order your creditors to stop all types of collection efforts immediately when you file chapter 13 case. Those who have a regular monthly income can file this case.
Thanks,
Alex
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Alex_Zee
Joined: 24 Jan 2006
Posts: 99
Debtcc Points: 1816
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| Posted: Thu Apr 20, 2006 10:19 am |
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No, I haven't been served by the court. A law firm is caling me because a Debt was sent to their office. They are threatning to sue and Garnish my wages but I haven't been served or anything like that. At this point they are just collection calls from the Law Firm. But they are scaring me, I can't afford to pay this right now and if they sue I wont be able to survive. It's hard enough already.
I was just conteplating my options. I was looking into maybe backruptcy but this debt is only $8000 and I have heard it isn't worth it.
Does anyone know of any Consolidation companies that take on debt already in the hands of a Law firm?
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rlrain
Joined: 18 Apr 2006
Posts: 13
Debtcc Points: 468
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| Posted: Thu Apr 20, 2006 10:25 am |
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As long as you have not been sued, try T & C. Their phone number is . i am currently using them for about $4000 in debt and I pay $27 per week.
Phone# deleted as per forum rules-Mike
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jmid1969
Joined: 30 Mar 2006
Posts: 102
Location: NJ Debtcc Points: 1512
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| Posted: Thu Apr 20, 2006 10:26 am |
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Did you send them a debt validation letter?
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jmid1969
Joined: 30 Mar 2006
Posts: 102
Location: NJ Debtcc Points: 1512
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| Posted: Thu Apr 20, 2006 10:31 am |
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I am using a credit clean up called Lexington Law Firm, which only disputes bad marks on the credit file. They Disputed the charge on 3/20 but I haven't received anything back as of yet.
What is T & C ? I have heard a lot about them from reading on this site. Is is a consolidation company?
I want to look them up on the internet..
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rlrain
Joined: 18 Apr 2006
Posts: 13
Debtcc Points: 468
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| Posted: Thu Apr 20, 2006 10:33 am |
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They are a consolidation company. Give them a call and try it. Before you declare bankruptcy.
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jmid1969
Joined: 30 Mar 2006
Posts: 102
Location: NJ Debtcc Points: 1512
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| Posted: Thu Apr 20, 2006 2:18 pm |
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I would not declare bankruptcy over $8000 in debt, it is not worth it to your credit. $8000 not paid would look better than bankruptcy. Also, I have had accounts with law firms in the past who have threatened until they were blue in the face, then nothing happened and they were sent back to the original creditor, only to be sent to another collection agency. Most of these "law firms" are only collectors used to threaten and scare you into paying, they do not always sue. They have made it really hard now to file for bankruptcy, and you may not qualify to file. You would have to consult an attorney. A bankruptcy attorney will need to see your last 3 years of income tax, last 6 months of pay, any assets you have, etc. Then you will be required to go through debt/financial counseling, which you have to pay for, plus attorney fees to file bankruptcy...by that time you could have paid off half of that $8000 almost. I would just start making payments that I could afford, and just see what happens. Most lawyers will not pursue it, because it is a real pain to have to fly to your state/city, go to court, and then be told by the judge that they have to accept the payments you are making because that is all you can afford. Judges are not necessarily the enemy, they will generally understand, and will not take everything you own and demand payment all at once. My main point is, don't automatically assume you are going to be sued just because your account goes to a bottom-feeding law firm.
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Guest
Debtcc Points: 100
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| Posted: Thu Apr 20, 2006 2:37 pm |
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That's correct. There are many more options to pay off your debts. Collectors and law firms use so many threats to get money from you. I'm not suggesting you to ignore them; however, you should not be that much panicky too.
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curlycarl
Debt Samaritan
Joined: 21 Jan 2005
Posts: 636
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