5 responses so far ↓

• 1 ranfot

  consolidation is not a bancrupcy
  they take all your bills
  and you pay 1 sum every month.

  so, I guess that lawyer got you plus you are paying his fees….

• 2 Feeling Mutual

  Chapter 7 bankruptcy is where your assets are liquidated to pay your debts, and all debts are discharged.

  In Chapter 13, you pay so much per month and after so many years, the debts are discharged.

  That is a simple explanation, talk to your lawyer for more details.

  In debt consolidation, you get a loan from a bank and pay all your bills off with the money for lower monthly payments. It ends up costing you a lot more in the long run, and your debts are never discharged until they are all paid off.

• 3 ricks

  for the bankruptcy, you pay a fraction of the amount owed for a set amount of time to the lawyer (or court, I am not certain). After that time, & money, it is discharged.

  for consolidation, you get a loan to pay off the other balances in full & then pay one amount to the lender. It is not a legal process or a discounted amount.

• 4 DLeibowitz

  First of all, there is no automatic stay in a “debt consolidation.” This means creditors can sue you if they want. Second, many many debt consolidators fail to pay anything to the unsecured creditors and then you are out the money altogether. Third, you don’t get a discharge from debt consolidation.

• 5 SoCal Attorney

  You don’t pay the money to your lawyer. You pay it to the Chapter 13. Chapter 13 is far superior to debt consolidation. Debt forgiveness in bankruptcy is not taxable. whereas debt relief through private debt consolidation usually is taxable income. A confirmed Chapter 13 plan is a binding court order on all of your creditors. Debt consolidation only applies to creditors who voluntarily agree to the plan. Finally, the automatic stay in bankruptcy stops all creditor harassment. Debt consolidation does not.