Posted on May 25, 2009 at 7:50 am I am not sure when someone would want to do this? Can anyone provide any insight as to why Chapter 13 bankruptcy would be a good idea?

Posted on May 25, 2009 at 8:30 am If you're dealing with unsecured debt like credit cards and personal loans, chances are you'd not want to file Chapter 13 bankruptcy.  There are a ton of other options that are either easier on your credit (debt settlement or credit counseling) or much less expensive (Chapter 7 bankruptcy).  Chapter 13 might be a good option depending on whether or not your debt is secured. I'm not a lawyer so I can't give you legal advice, but why don't you share with everyone your situation?  

Posted on May 25, 2009 at 8:36 am At this time I have three credit cards with a total debt amount of $26,000. I am not behind on my monthly payments (well, I have a couple of times but nothing consistent) but feel like I am not getting anywhere with the debt itself. I do not own a home- I am a renter, and I would like to avoid filing bankruptcy as I am only 26 years old. I know you mentioned debt settlement and credit counseling, can you give me some insight as to which may be a better option for me?

Posted on June 1, 2009 at 1:53 pm I certainly understand why you would not want to file bankruptcy. Since the debt you are dealing with is in fact unsecured, debt settlement may be helpful considering your debt amount. However, you should also determine exactly what your interest rates are and figure out how much of the principle amount of debt you are actually paying off each month. Credit counseling lasts 5 years typically, and these agencies work to lower your interest rates. If your rates are not very high, this would not be very helpful to you. Settlement, on the other hand, would have a more serious impact on your credit as the accounts have to be in default to settle (and thus being reported on your report as "past due"), but the programs are much shorter and you would have ample opportunity to rebuild your credit once the accounts are resolved.  

Posted on June 1, 2009 at 10:53 pm Your original question was when to file for Chapter 13- there are several instances like if you are facing a foreclosure or repossession, you have tax obligation, student loan, or other debts that can only be paid off over time through a Chapter 13 repayment plan...but none of them seem applicable to your situation, other than you have a sincere desire to eliminate your debt. I agree with the other posters when they advised you to give credit counseling or debt settlement a try. It seems as if debt settlement is the best option for you--in terms of eliminating your debt (which was your primary concern), although its impact on your credit is more serious  (than enrolling in a credit counseling program), the good news is debt settlement programs are much shorter than either a bankruptcy or credit counseling. I agree with Steven that after settling your debts, at least you would have plenty of time to rebuild your credit...it is up to you though, as it may require you to be behind on your payments first.

Posted on June 1, 2009 at 10:55 pm It sounds to me as if you need to speak with a professional regarding your situation, why don't you fill out that form on top, and avail of the free consultation.

Posted on July 10, 2009 at 2:56 am i am behind on my mortgage payment and i'm afraid of losing my house. is this the road i have to take now?

Posted on July 10, 2009 at 2:57 am also how will i know if i am qualified for chapter 13 of bankruptcy?

Posted on July 10, 2009 at 4:40 am Chapter 13 bankruptcy will stop all foreclosure proceedings and give you an opportunity to cure your unsecured debt over time. But you still must make your regular mortgage payments in the duration of your Ch. 13 payment plan. You're also given an opportunity to reschedule secured debts, and you'll be able to extend them while the plan runs. If you are an individual filer, your unsecured debts must be less than $336,900, and your debts w/collateral must be less than $1,010,650. Of course these rates vary. The same applies also to self-employed individuals, or if you are operating on an unincorporated business.However, I believe it has been illustrated how the disadvantages of bankruptcy will have adverse effects on your credit report, and you still have a number of options available.

Posted on July 10, 2009 at 5:04 am what if i run out of money while i'm making chapter 13 repayments? what happens then?