Chapter 13 vs. Debt Consolidation

For many people we’ve talked to in Milwaukee and Waukesha, bankruptcy and debt counseling seem almost interchangeable. Nothing could be further from the truth.

If you find yourself choosing between filing a Chapter 13 under the U.S. Bankruptcy Code and participating in credit counseling or debt consolidation, you should know the dangers associated with the latter option.

A Chapter 13 is a better option for several reasons. Here’s why:

  • It is less damaging to you

  • You do not have to pay interest or late fees

  • Creditors will no longer be allowed to call you

  • Your money goes towards your debt, not towards colossal fees

  • The potential of creditor lawsuits is nullified

Though “debt counseling” seems like a much friendlier term and “bankruptcy” can seem scary, know that there are legal protections in place for clients seeking bankruptcy that do not exist for debt counseling and similar services. The looser regulations on debt or credit counseling companies allow them to make it sound like a safer option in slick TV and radio ads. In reality, the potential for fraud is immense.

Many times in the past, we have had clients who tried to take advantage of “too good to be true” credit counseling or debt consolidation programs, only to discover that the programs were taking advantage of them. The clients we have talked to have given us horror stories, such as:

  • $500.00 or higher monthly fees
  • Credit card companies denied lower interest rates
  • After giving hundreds, sometimes thousands, to the company, clients found all their investment went to fees and not a bit to the credit card companies, who sought lawsuits against the client

These are just a small sampling of the many stories about such companies. Find security in your debt relief and file for a Chapter 13. Please refer to our page on Chapter 13, which describes how it works for you, not for your creditors.
Is filing for bankruptcy protection right for you?

Life is unpredictable, and bad luck can overwhelm even the most responsible of people from any walk of life. Whether you have experienced unemployment, health issues, divorce, decrease of income, or any other misfortune, bankruptcy will let you begin anew. As our financial markets and economy have grown more complex, bankruptcy has become more common across all income levels. Bankruptcy has lost a great deal of the social stigma it used to carry; instead, it is a financial tool so that you can once again have control of your life and finances.

More than anything, we want bright futures for our communities in Milwaukee and Waukesha – bankruptcy can help make that a reality. Contact us to learn more about your options. Attorney Michael Burr will personally help you determine the best possible solution to your unique debt situation. Don’t let scammers trick you!