Chapter 13 or Consumer Credit Counseling?

[SKJ]

I have talked with an attorney and I would be in a 100% chapter 13. Does it make sense to file or just go through Consumer Credit Counseling Service and pay the same amount?

[LadyInTheRed]

The big diffrence between a payment plan with a CCCS and Chap 13 is that in a Chap 13 you are in control and in a CCCS plan, the creditors are in control. Creditors do not have to particpate in a plan with a CCCS. They have no choice in a Chap 13 as long as your plan complies with the law. Also, interest stops accruing on unsecured debt in a Chap 13. The same is not true with a CCCS. I have been told that using a CCCS is as bad on your credit as a BK, but I can't confirm that. If you have a decrease in income or expensive emergency, you may be able to modify the Chap 13, get a hardship discharge or convert to Chap 7. If you can't make payments to a CCCS, you are at the mercy of the creditors.

I can't say which is a better choice for you, but before going with a CCCS, make sure you understand all of the costs and exactly how your payments will be disbursed to creditors.

[tissa]

I went with a chapter 13 at 100% because the interest on my cards was crazy over 30% in some cases. I didn't think the CCCS would be able to negotiate it down enough. With the Chap 13 I was told 4% or so at the most. It ended up at 0% interest and one of my biggest creditors didn't even file. So now I'll be paid off in 3.5 years. And personally it feels like I have more control.

[leonel9]

Aside from what was already mentioned above:
- When you participate in a debt management plan (credit counseling), your unsecured cards are closed and reported as "payment managed by counseling agency."
- Secured creditors are typically not included in a debt management plan. You have to negotiate with them directly.
- You have the ability to cramdown secured debts in bankruptcy -- not in a debt management plan.

You may also consider contacting your creditors directly and asking for hardship repayment plans. There's really very little that CCCS does that you can't do yourself. Plus you'll save the $35 or so monthly fee they charge.