Chase Debt Consolidation Loan

November 16th, 2009

Question: I am $20,000 in debt and facing litigations. Is a chapter 7 my best bet?

I have been lied to by everyone. I don’t even know how I got into this mess. I don’t want to file B.K. if it is my only option, I will. I have 4 Chase Cards and 1 Capital One Card. The total is about 20000. After the items go into litigation can I Consolidate all the Cards into one loan using a debt consolidation company. Is this even a good choice or should I just whip out the small amount of $20000 and start over. By the way I have a car loan I paid perfect on.

Answer: There is a lot of poor information in these previous answers.

From my observations, while it seems logical that filing a Chapter 13 is better, because it shows a "sign of good faith" in paying back a portion of the debt, that is NOT the case. All the creditor sees is the word "BANKRUPTCY" and you get rubber stamped. They don't care that you paid back a portion of the debt...They only see that you DIDN'T pay back some of the debt.

The funny thing is that if you go with a Chapter 7, you will find it is actually easier to get credit after your discharge. With no further financial commitments you are a better credit risk....but you will be paying a higher interest rate.

Steven's advice is dangerous. On the one hand, he preaches how bad a bankruptcy will look on your credit report, then he encourages you to let them sue you first! Do you have any idea what a judgment looks like on a credit report? It's not a nuclear bomb...more like a 10 ton bomb. And he wants you to take 5 of these first? THEN file bankruptcy on top of that? Nope...sorry....bad advice.

Johnny needs to do his research. The Bush changes did not exempt credit cards from bankruptcy.....the truth is if you have a lot of credit card debts that is the MAIN reason you would want to file! Unsecured debts are discharged completely! What he is getting confused about is the new law requires you to first pass a "means" test.....do you make too much money and/or have the ability to pay at least $100 a month toward your unsecured debts? If so you will be forced into a Chapter 13 plan that will require to pay back a PORTION of the debt.

Yes, BK is the last resort. I seriously doubt you will be able to get a consolidation loan. Bottom line, if these credit card companies are not willing to work with you, then don't pay them.

I worked with someone recently in the same boat as you are in. If you have decided to go BK, then stop paying your credit card debts. Put the money into the bank (not your own account, they could attach it). If a credit card company files to sue you, try to settle. If no luck then it's time to file for BK. It's a gamble....but many credit card companies will not sue for debts under $2000.

Federal Loan Consolidation & Best Student Loan Debt Consolidation Companies

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