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Bankruptcy Lawyer Hale Andrew Antico Reviews

Paying back Your Debts on Your Own Schedule

Home > Articles > Debt Consolidation

by Hale Andrew Antico, Esq.

Occasionally, I meet people who can make a payment to some of their credit cards, but not to all of them.  Or maybe you can (barely) afford your minimum payments now, but one of them raises the interest rate and you can no longer make the payments.

How do you choose which credit card or cards to pay, and which to ignore?  Is there an easier way than to only give some payments and ignore others?

The answer is, "yes."

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We've all heard of debt consolidation companies, usually advertising on the radio.  These outfits, some of them not fly-by-nights, promise to accept one payment each month and give it to your credit card companies.  However, how do they determine what that payment amount is?  Assuming you can afford the payment, exactly how long will it take you to pay them all off?  What percentage of people who start these plans finish them?  And most importantly, are you protected from a lawsuit if and when one of these companies gets impatient and decides to sue you?

In many cases, a Chapter 13 bankruptcy might be the answer.  It's like a debt consolidation plan, except it's run by the federal government, not a here-today-gone-tomorrow place.  The payment amount is decided by what you can afford, not based on what they demand.  In a Chapter 13 bankruptcy, the number of payments you make is set; you make them and you're out of debt, even if all the debt didn't get paid.  And yes, you get all the powerful protections of a bankruptcy, including stopping lawsuits, garnishments, and collection calls. 

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So, what does this look like?  Let's use a hypothetical example (your mileage may vary).  You are earning, say, $2500 a month after taxes.  Your rent, utilities, gas, food, etc. each month comes to about $2000.  That would leave you $500 a month for your 4 credit cards and debts each month.  If they each want $100 minimum, you can afford that... but you are not getting out of debt... you're just treading water.   On the other hand, if each of the four credit card accepts no less than $200 each, your $500 won't be enough to make them all happy and off your back.  If you file Chapter 13, they would need to accept your $500 each month for 36 months.  And you're out of debt.  Even if all those payments weren't enough to pay all of your debt in full. ==

Do you want to freeze interest rates, penalties, late charges and just make a set number of payments and be out of debt, once and for all?  Do you want the peace of mind that comes from knowing you won't be sued for your debt, and that the people you're paying -- the US Government -- are here to stay?  If so, filing Chapter 13 just might be the answer.

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