if you file chpater 13 bankruptcy, can you go into a debt management program instead?

Answer 1

This is not the best place for that type of information, but as far as I know the only benefit to a Chapter 13 bankruptcy would be if you stand to lose your home. I believe it gives you protection on that. If, however, you don't stand to lose a home it would seem that a debt management program might be a better idea.

If you look at credit applications they tend to ask, "Have you ever filed bankruptcy". Many automatically reject you based on that. If you go into a debt management program at least wouldn't have to answer "yes" on future credit applications; and even though right now you may think you won't be wanting or getting new credit the fact is you may want or need it in the future.

Obviously, I don't know the details of your situation; and I don't pretend to be a financial expert or bankruptcy attorney; but I'd look into all other options before filing any kind of bankruptcy (unless, as I said, you stand to lose your home and need protection on that).

Answer 2

Chapter 13 is usually better than a debt management program. Chapter 13 is a court-ordered repayment plan and legally binds all of your creditors. A debt management program is only good if your creditors voluntarily cooperate and the fees you pay can be outrageous.

However, you can voluntarily dismiss your Chapter 13 if you wish. Just be careful, because the new laws have restrictions on refiling to prevent people form filing for bankruptcy over and over and over again.

Although I am an attorney, this is not be best forum to get legal advice. See a local attorney who can spent more time with you to get your overall financial picture before you act.

Answer 3

Without more information about your situation it's difficult to recommend anything.

If the debt is small then obviously look into debt management. Better yet, deal with the creditors yourself. At the very least, contact a non-profect debt management company. Their fees can kill you.

I disagree with the above responder. First, chapter 7 is better to protect your home/property. If you have too much income you will not qualify for it. With Chapter 13, you still have to make a portion of the payments on your debt. But with either a debt management company or Chapter 13, the result is the same. You will have to pay a "trustee" all of your disposable income, and they will pay your bills. With the money you have left, you will have a very hard time getting by. And note that debt management does appear on your credit reports, and can have a bad effect. True, not as bad as bankruptcy, but it's still there.

Answer 4

Debt management could be an alternative to bankruptcy, depending on your circumstances. It is definitely worth exploring because bankruptcy is messy, complex and should only be used as an absolute last resort.

This website has some details and might give you more information.

Good luck!

Answer 5

If I had to choose between the 2, I would fill bankruptcy before I use a debt management program. The effects of using one of those companies outlast those of a bk.

Answer 6

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