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  1. #1
    Join Date
    Mar 2006
    Location
    tn
    Posts
    3

    Default Debt Consolidation or Bankruptcy

    We are $60000 in debt and can not figure out which route to take. If you do the debt consolidation or bankruptcy, they both hurt and stay on your credit report. Need some help.

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Debt consolidation?

    By "debt consolitation" you mean credit counseling? Debt consolidation would typically mean that you find a lender who is willing to give you a loan sufficient to pay off all of your existing debt, consolidating your debts into a single loan with a lower total monthly payment.

  3. #3
    Join Date
    Mar 2006
    Location
    tn
    Posts
    3

    Default Debt consolidation or bankruptcy

    Some companied will charge you around 15% to get a lower payoff amount on your loans. Which has to be paid off within 48 months.
    And some will try for lower intrest rates which will still take 6-10 years to payoff. All of which kills your credit or go bankruptcy?

  4. #4
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default

    So you're talking about credit counseling, not refinancing.

    The type of negotiation you describe is generally regarded as almost as harmful to your credit as a bankruptcy proceeding, but under the Bankruptcy Reform Act it may be required before you can proceed with a bankruptcy. Even a Chapter 13 bankruptcy would likely result in a more favorable payment plan than either option you describe. Your best bet is to discuss your situation with a local bankruptcy lawyer to decide what is best for you.

  5. #5
    Join Date
    Mar 2006
    Location
    tn
    Posts
    3

    Default bankruptcy???

    I'm trying to keep our home a transportation so I can still make some income, I've heard we would loose this. True? Even with Chapter 13.

  6. #6
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default

    A bankruptcy lawyer can explain your exemptions under the laws of your state. This site provides an overview of Tennessee's exemptions:
    Quote Quoting Tennessee Bankruptcy Exemptions
    In a Chapter 7, most of your property will be sold by a Chapter 7 trustee and the money will be given to your creditors. You can keep some of your property if it is considered to be exempt property under the laws of Tennessee. You can protect up to $4,000 worth of property that is not real estate (personal property). If you own the house in which you live, it might be sold in bankruptcy. However, a single homeowner can exempt $5,000 from the sale and a married couple filing bankruptcy together can exempt $7,500. There are other exemptions an attorney can discuss with you.

    Also, in a Chapter 7, if a debt is secured (you granted a creditor an interest in property, such as a home or car, to secure payment of the debt), you will probably be required to surrender the property, unless you become re-obligated to the creditor on that debt (reaffirmation of debt).

    In a Chapter 13, you usually keep all of your exempt and nonexempt property so long as you make monthly payments, as approved by the court, to the Chapter 13 trustee.

  7. #7
    Join Date
    Mar 2009
    Location
    Key West, FL
    Posts
    2,350

    Default Re: Debt Consolidation or Bankruptcy

    Any debt counseling agency that asks for any significant money upfront is a scam. They take your money and do little or nothing for you. The ones that do accomplish anything mainly accomplish screwing up your credit and save you a few bucks. Be very careful and do your homework before signing up with any private business or even a non-profit that says they can help you.

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