(To find an approved agency in your area, go to the Trustee’s website, , and click “Credit Counseling and Debtor Education”.) The purpose of this counseling is to give you an idea of whether you really need to file for bankruptcy or whether an informal repayment plan would get you back on your economic feet.
Counseling is required even if it’s obvious that a repayment plan isn’t feasible or you are facing debts that you find unfair and don’t want to pay.
These other options involve consolidating your payments through a credit counseling service or consolidating all your debt through a debt consolidation loan.There really are two types of debt consolidation loans, one that is secured by equity in your home and one that is not.To do so, you must sign a voluntary “Reaffirmation Agreement”.If you decide that you want to keep your house or your car or your furniture, and you reaffirm the debt, you cannot bankrupt (or wipe-out) that debt again for eight years.Certain debts cannot be discharged in a Chapter 7 bankruptcy, such as alimony, child support, fraudulent debts, certain taxes, student loans, and certain items charged.
(see Pennsylvania Non-Dischargeable Debts) In most Chapter 7 cases, the debtor has large credit card debt and other unsecured bills and very few assets.
i Stock.com/gradyreese Debt settlement, or agreeing to pay a creditor less than you owe, should be avoided, if possible.
It's a huge mark against your credit score, and the fees and taxes you pay as a result of the settlement may offset what you save by paring down the debt.
In the vast majority of cases a Chapter 7 bankruptcy is able to completely eliminate all of these debts.
You may keep certain secured debts such as your car or your furniture or house by reaffirming those debts.
"Don't wait and think the creditor is going to go away."As long as your debt hasn't already been written off, some creditors may be willing to talk about debt settlement as your account becomes more delinquent because they see it as a loss risk.