Comparing Chapters 7 & 13 Bankruptcy

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Comparing Chapters 7 & 13

Because we always want you to make an informed decision, we have provided this chart comparing Chapter 7, Chapter 13, and Credit Couseling for you.

There are a variety of tools available to allow you to get out of debt and rebuild your credit. Millions of Americans are involved in debt counseling. Consumer Credit Counseling is a bit of a misnomer. We view this industry as glorified debt collectors with good PR. Ask yourself, what is the difference between a debt ‘collection agent’ and a ‘consumer credit counselor’? One threatens you with garnishment, court judgments, some even threaten to send you to jail (something which is entirely unethical). The other gives you a dream that you can get out of the debt nightmare and start over again. But in the end, they are both doing the same thing aren’t they? They are getting your money.

Don’t be fooled by the ‘non-profit’ designation either. That’s a nice word that makes consumers think it won’t cost very much for the services of the consumer credit counselor. But it does not mean you’re paying any less! It means only that the company makes sure that the books reflect zero profit at the of the year. This does not mean that the owners of the company don’t make exorbitant salaries for their services.

If it sounds like we’re biased, we are. We despise consumer credit counseling agencies. Many of our clients come from counseling agencies who overcharged for their services and did not even come close to getting the results advertised. Many client’s credit scores are even worse after they enroll in the service. That’s not counseling. . . that’s debt collection. We’re sure there is a satisfied customer out there somewhere, we’ve just never met one.

The chart below is set up to compare the different kinds of consumer bankruptcy to credit counseling. You can see the advantages and disadvantages of each.

	Chapter 7	Chapter 13	Credit Counseling
1. Deals with every debt from credit cards to taxes to medical bills and child support.	Yes	Yes	No
2. Allows for a fresh start debt free in 90 days	Yes	No	No
3. Allows for the reinstatement of your driver’s license	Yes	Yes	No
4. Can Stop a foreclosure sale in its tracks	Yes	Yes	No
5. Ensures legal protection to protect the debtor from harrassment by creditors	Yes	Yes	No
6. Requires all pending lawsuits to IMMEDIATELY Stop	Yes	Yes	No
7. Stops all garnishments allows the debtor to recover the money actually garnished from their employer.	Yes	Yes	No
8. Allows you to pay back a portion or all of your debt interest free	Yes	Yes	No
9. Allows you to avoid cashing in your 401(k)	Yes	Yes	No
10. Allows you to obtain credit again afterward	Yes	Yes	Yes
11. Allows to you lower your car payments	No	Yes	No
12. Allows you to surrender your car or home without negative repercussions	Yes	Yes	No
13. Allows you to stop worrying about nagging creditors	Yes	Yes	No
14. Repayment is based upon what you can afford, not what creditors demand.	N/A	Yes	No
15. Stop repossessions and foreclosures to allow you to sell for market value rather than be pressed into a short sale.	Yes	Yes	No
16. Affects your credit score in the same manner.	Yes	Yes	Yes
17. Stops the continued downward spiral of your credit score.	Yes	Yes	No
18. Levels the playing field with your creditors.	Yes	Yes	No
19. Allows you to go after your lenders for violations of the Unfair and Deceptive Practices Act.	Yes	Yes	No
20. Deals with secured and unsecured debt	Yes	Yes	No
21. Deals with medical bills, collections, and non credit card debt.	Yes	Yes	No
22. Gives you the fresh start you deserve and wipes the slate clean!	Yes	Yes	No

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147 Union Avenue, St. 1E
Middlesex, NJ 08846
Tel 732.302.9600
Fax 732.302.9066
* Licensed in NJ & PA

Email Bruce C. Truesdale

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