Bankruptcy

Chapter 7 bankruptcy may eliminate most kinds of unsecured debt. Some examples of unsecured debts Chapter 7 may eliminate are credit cards; medical bills; most personal loans; judgments resulting from car accidents; and deficiencies on repossessed vehicles.

Chapter 13 bankruptcy is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. While in a Chapter 13 debt repayment plan, the creditors cannot collect from you, and the creditors are required by a Federal Court order to adhere to the terms of the plan.

Consumer Credit Counseling

Consumer Credit Counseling is a form of debt repayment wherein the credit counseling agency contacts consumers’ creditors and works out a program to resolve their debt. Although it resembles debt settlement, instead of being funded by the consumer, consumer credit counseling agencies are funded by the creditors they are settling your debts with.

Consumer Credit Counseling agencies claim to be able to reduce a consumer’s debt by 50%, however, many proponents allege its actually closer to 10-20% in practice. Many Consumer Credit Counseling agencies have been successful in reducing the accruing interest and even stopping additional interest from accruing during the program