December 15, 2019

CCCS vs. Bankruptcy – What Makes the Most Sense?

I am sitting here wondering two things…am I qualify to file bankruptcy and should I file bankruptcy.
I have unsecured debts…c/Cards and student loans avg. 50,000.  I have a mortgage of 1.000 monthly.  I AM ENROLLED IN CCCS AND IS PAYING ABOUT 900.00 monthly.  I have high medical bills and child support payments avg. 600 monthly…after working many many hours of overtime my income last year was 54,000.  I am single/seperated…what should I do and how should I do it….HELP.
–Jeff

Jonathan Ginsberg responds:  Jeff, thanks for your question.  Here is how I would analyze your situation:

  1. Bankruptcy is always a last resort.  Whatever positive information you hear about bankruptcy (and there are some positives), you always run a risk when you file for bankruptcy.  Why?  Your financial future will be in the hands of others (trustees, judges).  Creditors can put you in the position of having to litigate (expensive) or give up bankruptcy protection.  While most bankruptcy cases process through the system without hassles, there is always the chance that your case could blow up.  Additionally, you will see your credit score destroyed (at least in the short term) if you file for bankruptcy.
  2. Given your income, I would think that you would be limited to filing Chapter 13.   Although the median income limit for a single individual changes once or twice a year, the current median income for an individual filing in Georgia will be in the $40,000 range.  Your income is significantly higher – therefore I suspect that you will be looking at a Chapter 13.
  3. Currently, you are paying $900 per month + your mortgage + high on-going medical expenses.  Chapter 13 might make sense if it could reduce that $900 payment to $600 or  $500.   The only way to know that would be to submit all of your financial information to a bankruptcy lawyer for a personalized review.  If you want me to review, I would direct you to a special download page of my Atlanta bankruptcy web site, where I identify exactly what I need to analyze your specific case for a possible bankruptcy.

 

About Jonathan

Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need personal bankruptcy protection. In practice for over 25 years, Jonathan teaches bankruptcy law and practice at legal continuing education seminars and he is a founding member of the Bankruptcy Law Network. Jonathan lives with his wife and children in Atlanta.

Comments

  1. I have to say there are some serious drawbacks to CCCS for people teetering on the edge. Not all creditors are required to participate and there’s no way to force them to either, so while CCCS may be able to help with some, you run the risk that not all creditors, including some of the largest CC issuers, simply won’t play ball. The fact is, they don’t want consumers in a debt management plan, they lose too much money ! The fact is, CCCS is controlled and funded by the very creditors people are looking for help to pay.. they are NOT on your side !

    If the person falters in any way, there is absolutely no protection, no meaningful help if a lawsuit is filed and certainly no help once a judgment is entered.

    While many CCCS places will tell you they can help you pay off your debts in 36 months, the truth is that they cannot hold to that and a person may get stuck for far longer. CCCS looks BAD on your credit reports, it is a negative entry that will stick to your reports like glue for the full 7-1/2 years.

    Even given the risks of a bankruptcy, at least you get protection from creditors, they all participate whether they want to or not and if they do not (by filing a POC) then they get nothing. A 3-5 yr Ch13 on a tight budget is no picnic, but at least you know there’s an end and you know that creditors can’t do much to you while you’re in the plan. I’d take BK risks over the risks of CCCS any day !

  2. For a lot of people there is a middle ground being debt settlement, some people are not in the position to really maintain a CCCS program, however at the same time they do not really need to claim bankruptcy. If someone is considering going bankrupt than more than likely the amount of debt they have is to much for them to stay on top of, so the question should be really debt settlement or bankruptcy.

  3. I HAVE A LOAN THAT FOR ALL INTENTS AND PURPOSES HAS GONE BAD. I AM WONDERING IF CHAPTER 13 OR CCCS WOULD HELP. CAN ANYONE GIVE ME SOME ADVICE OR POINT ME TO SOMEONE IN ATL THAT I CAN INQUIRE WITH? THANKS.

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