How is CH13 diff from debt settlement?

[HalfPaycut]

What are the advantages of filing for Chapter 13 and having to pay back some of the debt versus getting a creditor to accept a lower amount on your own?

[Over our heads]

Debt settlement I believe you pay taxes on the forgiven amount.
When we were researching, I came out feeling like Ch. 13 was the legal way, and debt settlement was the crooked way.

Most settlement companies won't help you if you get sued, you will be responsible for either taking care of it yourself or hire a lawyer.

I suppose a settlement route would work well if one suddenly came into a lot of money and could effectively settle all their accounts in one fell swoop. As opposed to having to save money up over a long period of time.

Those are just my thoughts!

[krielly]

A Chapter 13 FORCES your creditors to accept your plan once confirmed. Debt settlement companies cannot force any of your creditors to do anything. You yourself can do what debt settlement companies do.

In additon, further and penalties cannot acrue in a 13 for unsecured debt.

Don't believe for one minute that there will be any less of an impact on your credit score doing settlement vs 13. No matter what they promise, accurate information cannot be legally deleted from your CR.

[elster]

Also, if your disposable income changes during the plan lifetime Ch13 has provisions for dealing with that. I think debt settlement companies aren't based on disposable income.

[HHM]

Also, Debt settlement is not a payment plan, debt settlement requires lump some payments to your creditors.