Oklahoma Bankruptcy HelpIs a Debt Management Plan Better Than a Tulsa Chapter 13?
Even those making a healthy income may struggling financially these days. Debt problems are caused by over-spending and that can happen to anyone, even in Tulsa, without a debt management plan.
If your debt is spiraling out of control, you are likely looking for a solution to your financial woes. One of the most important decisions you will make is whether to work with a debt management plan service or whether to file for a Chapter 13 reorganization plan.
These two financial tools are similar in some ways, and vastly different in other ways.
Debt Management Plans and Chapter 13 Similarities
Debt management plans and reorganization under bankruptcy Chapter 13 share some similarities. Both provide the debtor a single monthly payment to be distributed under a plan to each creditor for a specific period of time. Both take somewhere between three and five years to complete. Both can provide some financial relief.
That is where most of the similarities end.
Pros and Cons
If you choose to work with a debt management plan, it is important to choose one that is a non-profit and that has a good reputation. A non-profit credit counseling service is not in the creditor’s pocketbook. But many of the for-profit services are run by creditors. And if you choose a non-reputable company and they mishandle your debt payments, collection efforts will resume.
A counseling service plan won’t reduce your overall debt, but they can access lower interest rates with your creditors and might be able to set a monthly payment amount that is less than you were paying before. In essence, this reduces the total amount that you owe.
These plans charge a monthly fee.
Chapter 13 is a debt reorganization plan that is run by the bankruptcy court. Instead of reducing the debt, a bankruptcy trustee puts together a payment plan for creditors based on your assets and disposable income over time. At the end of the plan, any remaining debt is discharged.
Depending on the amount of debt you have, you may end up paying less money overall in a Chapter 13 filing. And there is little chance of a mishandled payment in bankruptcy court.
Chapter 13 costs more initially to file — $310 in 2018 — but there are no monthly fees once the plan is set up other than the monthly payment to the creditors under the plan.
A bankruptcy filing appears for years on your credit report. Your credit rating can recover from a bankruptcy, but it can take years to do so. Debt management programs do not have nearly the negative impact on your credit report.
Whichever you choose, make an informed choice with the guidance of a qualified Tulsa bankruptcy attorney.
Free Bankruptcy Planning: Tulsa Bankruptcy Lawyer
To get the best possible outcome in your bankruptcy case, you will need to set expectations for yourself and also understand your attorney’s expectations of you.
If you’re ready to file, contact a Tulsa bankruptcy attorney at the Freedom Financial Bankruptcy Lawyers of Tulsa as soon as possible.
To receive your free initial bankruptcy analysis, call the Freedom Financial Bankruptcy Lawyers of Tulsa today at (918) 786-9600.
Tags: bankruptcy options in Oklahoma, debt management plan relief in Oklahoma, debt management plan vs. Chapter 13 relief, Tulsa Oklahoma bankruptcy lawyers
