This is the first real article of this new blog devoted to all things debt settlement. And the idea for this article came to me because so many people seeking debt relief have limited options and feel somewhat trapped. Of course working with a good credit counselor always helps because the really good ones who are few and far between have made a calling out of their trade.
So, here is the situation that this consumer was confronted with. 25,000.00 dollars of credit card debt on one credit card and not enough money to make the payments. So, her first thought after calling me was to learn more about a debt settlement program.
The payments would have been manageable but only if the term of the program went five years. Good luck getting a good settlement company to accept one debt for a term of a five year plan, especially when the consumer qualified for a Chapter 7 bankruptcy. I knew this because I sent her for a free telephone bankruptcy consultation. So, it should have been simple you say.
Well, not so fast. A major complicating issue was that her religious faith would simply not allow her to walk away from the debt, which is why she was interested in settlement, because there she would at least be paying back partially.
Of course a debt management program was out of the question, as they rarely reduce monthly payments except nominally. So, what to do, what to do? Well, thinking creatively, while a chapter 7 was out of the question, what about a Chapter 13. This is basically a debt settlement with the protection of the courts. The law on a chapter 13 says that the payments made to the trustee over the life of the plan, may not be less that an amount that would be gained in a Chapter 7 liquidation. OK, what that means is the payments in the plan for this consumer would be extremely affordable. Problem solved.
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Yours Truly
Steven Ciantro
Consumer Advocate
American Debt Enders
Certified Credit Counselor
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