How does chapter 13 differ from a private debt consolidation service?
In a chapter 13 case, the bankruptcy court can provide aid to the debtor that private debt consolidation services cannot provide. For example, the court has the authority to prohibit creditors from attaching or foreclosing on the debtor s property, to force unsecured creditors to accept a chapter 13 plan that pays only a portion of their claims, and to discharge a debtor from unpaid portions of debts. Private debt consolidation services have none of these powers.
In a Chapter 13 case, the bankruptcy court provides for a type of debt consolidation, just as private debt consolidation services do. However, only the court has the authority to prohibit creditors from attaching or foreclosing on the debtor’s property, to force unsecured creditors to accept a Chapter 13 plan that pays only a portion of their claims, and to discharge a debtor from unpaid portions of debts. Private debt consolidation services have none of these powers. If you take the debt consolidation option, you run the risk of liens, lawsuits and garnishments while you are attempting to pay off your debts.
In a chapter 13 case, the bankruptcy court can provide aid to the debtor that private debt consolidation services cannot provide. For example, the court has the authority to: prohibit creditors from attaching or foreclosing on the debtor’s property; to force unsecured creditors to accept a chapter 13 plan that pays only a portion of their claims (and in most cases no interest); and to discharge a debtor from unpaid portions of debts. Private debt consolidation services have none of these powers. Top • What is a Chapter 13 discharge? It is a court order releasing a debtor from all dischargeable debts and ordering creditors not to collect them from the debtor. A debt that is discharged is one that the debtor is released from and does not have to pay. There are two types of chapter 13 discharges: • a full or successful plan discharge, which is granted to a debtor who completes all payments called for in the plan, and • a partial or unsuccessful plan discharge, which is granted to a debtor
In a Chapter 13 case, the bankruptcy court in Seattle can provide aid to the debtor that private debt consolidation services cannot provide. For example, the court has the authority to prohibit creditors from attaching or foreclosing on the debtor’s property, to force unsecured creditors to accept a Chapter 13 plan that pays only a portion of their claims, and to discharge a debtor from unpaid portions of debts. Private debt consolidation services have none of these powers.
In a chapter 13 case, the bankruptcy court can provide aid to the debtor that private debt consolidation services provide. For example, the court has the authority to prohibit creditors from attaching or foreclosing on the debtor’s property, to force unsecured creditors to accept a chapter 13 plan that pays only a portion of their claims, and to discharge a debtor from unpaid portions of debts.
