Many people struggling with a large amount of debt are unable to qualify for any debt consolidation loans or credit card balance transfers. By the time they start seeking this type of help, their credit score has dropped too much. They may not realize that Chapter 13 bankruptcy actually functions as a form of Debt Consolidation in Wellington FL. This is a suitable option for people who could afford to make one monthly payment that would be much lower than the numerous payments they are responsible for now.
A Single, Lower Monthly Payment
When filing for this type of bankruptcy, all the person’s qualifying financial obligations are combined, and a single monthly payment is arranged. The arrangement can last up to five years, over which time all the outstanding obligations are paid back. This individual must stay on track with current obligations, too. This can be a challenge, but determined men and women often are able to make it work.
No More Interest Charges
Along with the more affordable payment, this type of Debt Consolidation in Wellington FL also has the advantage of no more interest charges being added to the amounts due. That can help out a great deal in the long run when compared to trying to pay down a credit card with interest fees added every month.
Qualifying Debt
Unsecured debts are included in this arrangement. That means credit cards, medical bills, and payday loans can be put into the bankruptcy plan. Student loans and back child support do not qualify. Chapter 13 plans generally do not allow debt that was acquired within the past few months. Trustees view this as “bad faith,” with the suspicion that the person ran up debt with the intention of filing for bankruptcy.
The amount of unsecured debt that will eventually be paid back may actually be reduced, but the bulk of it will not be discharged, as is the case with Chapter 7 bankruptcy. People who cannot afford a monthly Chapter 13 payment have that option to consider instead. To learn about Law Offices of Sean I. Koplow and schedule a consultation, visit the website.
