Where I should start?

John, you have two different options besides negotiating with your creditors on your own? Have you talked with your lenders and arrange some payment plans?

Do you want to consolidate the debt only? Or, do you wish to take a settlement offer considering the debt to be huge?

A counselor will be calling you soon and compare the options you have.

I just found out that debt settlement won't work due to the new bankruptcy law. Even it works, I don't have the lump sum of money to pay them all at once.
And debt consolidation loans transfer the debt from one account to another and typically takes an unsecured debt(s) and changes it into a secured debt (usually your home). If you do not have enough equity (typically 25 30% LTV), bad credit, or too much debt, it is not likely that you will be approved for a debt consolidation loan. So it looks like I have no choice that I have to file BK. :-( Is there any way I can stil keep my house if I file BK?

Talk to a bankruptcy attorney before you make this decision. He will review your financial situation before your debts are discharged. I think you can try for a chapter 13 bankruptcy. It will sound a better plan to pay off your past debts over a period of 3 to 5 years.

I have been in debt settlement program for 9 months now and things are going good. I am not sure I understand what you mean by saying the debt settlement will not work due to new bankruptcy law...????

I think I need to either do a debt settlement or BK Ch.13. Which debt settlement company is good, Linda? How much do they charge for the fee? Do you have pay all in a lump sum or you can pay what you can afford monthly? Isn't the new BK law requires to pay back the debt? So why will credit card companies want to settle if they can get their money back even you have filed BK. Gretchen, if I filed BK CH. 13, I have to pay the debt in 3 to 5 yrs? I don't have I can do that. Do they reduce the amount of debt like debt settlement? What about BK Ch.7? Will all my debt eliminated? I am thinking to sell my house and give the leftover money back to my parents and file CH.7. Can I do that? I feel so sad now. I don't even want to talk to a debt consultant at this point. :-(

It is my understanding you can still file chapter 7 and it all will be eliminated.....

You just have to have counsiling and the fees to process and file has went up alot. I qualify for chapter 7, however they prefer me do everything I can to do that and Settlement is my last resort.

debt consolidation loans were mentioned - but have you looked into a consolidation company? They do not provide a loan to pay for the debt, but rather they combine all of your payments on unsecured debt into one payment (typically lower than what you might be paying/month now). And, one of the best parts about going through a consolidation company, they often negotiate lower APRs and sometimes get late fees and such taken off the accounts. This helps your payment apply more towards the principal and less towards the high interest that can sometimes come with unsecured debt.
Do not, under any circumstance, take out a loan to pay for debt. That just puts your right back into the cycle and doesn't really help you at all.

what is the difference in the chap. 7 & 13 bankrupcy ?

When you file for bankruptcy, the petition requires that you list the names of all the creditors whom you owe a debt. The creditors are notified about your filing of bankruptcy and the debts are on the process to get discharged. One of the purposes of filing chapter 13 bankruptcies is to protect your home from any possible foreclosure and to prevent potential lawsuit settlements. If a vehicle has already been repossessed, you may not get the vehicle back, but there is protection from deficiency balance lawsuits. You need to a qualified bankruptcy attorney in your area for specific advice. If you have a good bankruptcy planning and a qualified attorney handling your case, you will not lose anything unless you want to. Those who are thinking of filing a bankruptcy must schedule an appointment with a bankruptcy lawyer for revision of the total financial picture including the net value of the assets. The rules and laws of federal bankruptcy will be applied in accordance with your state laws so that you get the perfect bankruptcy relief as per your situation.

Chapter 7 eliminates your debt (student loans not included) completely... BUT for a price. It will sit on your record for quite a while.
I believe chapter 13 establishes payment plans with the companies you owe money to.
Someone correct if I'm wrong.

Both require "education sessions" that didn't used to be a requirement (but should have been!).

Ah - Justme beat me to the punch and did a much better job at it. I gave the abridged version :)

Ehwin, you also did a very nice explanation on this one. :) We might have used different words to explain the thing, hope it's clear to all.

Aww... thanks! It's tough to get advice from non-lawyer types now that the bk laws of changed. I filed chapter 7 a few years back and could have told anyone about the process and what I went through - but now that it's all changed, I can only give basic info. Not that I'm complaining - changes are good.

I don't think I can do debt consolidation, it will take my whole life to pay back even they reduce to 0% interest and no fee.
Debt settlement: if they can reduce 50% of the total debt and stop charging me interest, I think I can pay them back. Can I pay them in monthly payment that I can afford? And is there a limit of time (like within 5 yrs) I need to pay the total debt? Which debt settlement company is good (PM me if necessaary for the company info). But I am sure if I talk to a debt consultant, they will ask me to do debt consolidation or settlement instead of filing BK.
BK Ch.13: is this similar to debt settlement? Do I get the total reduced and need to pay them back within 5 yrs? I don't think I can pay them back in 5 yrs. And is there any salary garnishment? I am sure if I talk to a BK lawyer, they will ask me to file BK instead of debt consolidation/settlement. Any good BK lawyer around the Bay area, CA? Is there any goverenment aided BK lawyers?
BK Ch.7: This is my last resort. Do I get to keep my car? And is there any salary garnishment?

Thanks a lot for the info & this site. :-)
compy168

yeah both just and ehwins were help full but with me i understood ehwins better im more of a short and precise kidn of gal. lol thank you both for the info

If you choose a debt settlement program, a separate account will be opened where you will be sending your monthly payments. In the meantime, the settlement company will be negotiating with your credit companies for a settlement amount. It will take time for your proposal to get finalized. Once the negotiation is accepted, money will be sent from your account to the company. Thus, you need to make regular payments towards the account so that you don't fall short at the final stages.

Chapter 13 and debt settlement are looked in the same way. In the former one, you get your payment plan set by the court without interference of your credit companies. Your pay stubs, credit reports and income tax returns decide the payments you can afford.

Looking at the various options, you need to decide which one will work for you in the best way. The most important thing is not to allow your credit standing deteriorate further. You will get time to improve your standing over a period.