Junk Debt Buyers & Debt Settlement

Individuals have two different types of bankruptcy debt relief programs: They are Chapter 7 bankruptcy and Chapter 13 bankruptcy.

The Pros of Chapter 7 Bankruptcy 

Chapter 7 bankruptcy is when a debtor seeks to have all debts erased. The positives associated with this type of bankruptcy are:

• All collections agencies must cease trying to collect the debt 
• It may be able to reverse wage garnishment 
• Debtors without any assets have a chance to see their debts erased completely 
• If they do have property, some of the liens on them may be released 
• They will be starting with a clean slate 

The Cons of Chapter 7 Bankruptcy 

Chapter 7 bankruptcy also has some negatives, and they are:

• The trustee that is appointed to people filing bankruptcy has control over how they spend their money 
• The bankruptcy remains on their credit reports for a maximum of 10 years 
• The bankruptcy remains visible in court records for 20 years 
• Employers may decline to hire applicants who have filed bankruptcy 
• People become emotionally distressed 
• Not as many people can file for bankruptcy as before the year 2005 
• It may not be as financially beneficial as the “New Deal” 
• Very rarely can people discharge student loans or the taxes they owe the government 

The Pros of Chapter 13 Bankruptcy 

With Chapter 13 bankruptcy, people aren’t having their debts discharged; they are creating a court-approved plan to pay their debts. The trustee administers the money to be paid to the creditors for a period not to surpass five years. The advantages are:

• It gives people a way to catch up on their missed payments 
• After a Chapter 13 filing, collections agencies are not allowed to continue their collections efforts 
• Debtors only have to make one payment every month 

The Cons of Chapter 13 Bankruptcy 

As can be guessed, Chapter 13 bankruptcy also has its disadvantages. These are:

• A Chapter 13 bankruptcy only remains on their credit reports for seven years, but it will stay on the court’s records for as long as the Chapter 7 bankruptcy, 20 years 
• It requires paying all late fees owed the creditors and paying the trustee’s fee 
• Even though the debtor pays a large portion of their debts, they still suffer the negative consequences of having filed for bankruptcy