bankruptcy vs debt settlement

[klandsb]

Very, Very new to this site. I am currently enrolled in a Debt Settlement Company...At the time I enrolled it was Consumer Credit Counseling $700 mth, mininum pmts $800mth , Debt Settlement Co $500 mth and the thought of bankruptcy didnt even enter my mind
So I have been paying my settlement co for 10 mths...they have been paid approx $3500 for doing almost nothing, have approx $1000 in bank acct and not sure about the other $500 but its there somewhere ..
Long story short I have been sued by Mann Bracken for a Lowes Credit Card. I have 14 days left to reply (started at 20). I am a total nervous wreck. Now I am considering Chapter 13... It is my understanding (correct me if I am wrong)..I am current on everything possible except my credit cards which now total $28,000 roughly. I want to keep my house & car so I am thinking Chapter 13 allows you to do that ??? Do I have to reaffirm these loans even if they are current ???
Also, I recieved a 3500 bonus on one of my Feb paychecks ... THat was before taxes (which they killed me on because my pay was also added) but this is not guarenteed every year ..It is a yr by yr thing. IF they go back 6 mths on your paycheck would it mean in Aug they would go back to March or do they go by your year to date income ?????
I know I am asking way toooo many questions. I am stressed and rambling ..So Sorry...

[justplaintired]

Chapter 7 allows you to keep your house and car if you are current on your payments. Alot depends on your income.Even if you are over on the median income, you may still qualify for C7 even if you are over on the income. This will require doing the means test which can be done online.

http://www.legalconsumer.com/bankruptcy/means-test/index.php

I think I would contact an attorney and start with a consultation. You need to do something as you most likely will be garnished. The problem with debt settlement is normally it just doesn't work. They basically take their money first, then pay towards cc. Don't panic, but don't mess around either. Calling an attorney will get you on your way and they can advise which chapter you will qualify for.

Also the time frame on filing is a 6 month look back. So in other words it's 6 months of paycheck stubs. Filing in August they look back to March-August, so in other words your bonus is not longer consider in your income.

Also you will find all kinds of info on this site. Spend some time researching. Just about every question you have has been asked by someone else at one time.

Best of luck to you!

[klandsb]

Thanks

I thank you for your info. I was so dumb in thinking that the settlement thing would work but they make it sound so good when u talk with them... Yes, they have taken a large chunk of the money so far...
I am just really concerned because I have worked for a utility company for 29 yrs and just 2 yrs ago I got a really good job but before that I was traveling 110 miles a day to work and gas prices at the time were outrageous and I wasnt making the money I make now but I had child support ..I charged ALOT of gas during that time and had some major things come up that I had to charge and the credit card companies at that time just kept giving me more and more money and I took advantage of it... Now I am paying the price... I am soooo stressed out right now......
I am kinda having a hard time managing my way around this web site...Hopefully it will get a little easier with time...Like I said I am just stressed and tired....

[justplaintired]

We are all stressed, this site will help you with that. CC companies suck us in by all those credit increases...., don't worry that is what got alot of us here.

Just calm down take a deep breath, read and learn. Be prepared for what is to come. This site can help with that.

Big step is calling some attorneys. We found an attorney who we felt very comfortable with and who advised us the steps to take. Don't put off calling around and finding one. Best advise I have is read everything you can on this site. Do the means test I included in the post above. See where you fall.

Good luck and welcome to BKforum.

[dirtpoor]

We also tried the debt settlement route. Paid approximately 10 months and got sued by GE Money bank. That's when the debt settlement company said there was nothing they could do. At that point we knew we had to consider bankruptcy. Filed June 1 and had 341 meeting yesterday. I wasn't done fighting though. The debt settlement company was in Florida (we live in Missouri) and I contacted the BBB there and the Florida AG. That didn't help. I also contacted the FTC. I was watching the news one night and there was a story about the Missouri AG suing a debt settlement company for not fulfilling there end of the deal. Also found out in Missouri that it is illegal for debt settlement companies to charge the fees upfront. I sent a letter to the Missouri AG and about 3 weeks later recieved a check in the mail for the full amount we paid into the debt settlement plan. If you decide to do bankruptcy, go after the settlement company. The one we dealt with was just a scam.:

[klandsb]

Very Interesting....

I am very interested in hearing about possibly getting money back that I paid them for absolutely nothing but sending some cease & desist letters.
DO you have any idea where I could go to find out in my STATE if its legal to collect the fees upfront ???????

[dirtpoor]

I would contact your states attorney general and ask them about it. My bankruptcy lawyer didn't know that it was illegal. I was so mad because they made all these promises to help us and when the lawsuits came, the debt settlement companies first question to us was "How much money do you have to try to settle with them?" I told them that if I had the money to settle I wouldn't need there service. Then they told me they were not allowed to deal with them. I would start sending letters to every consumer agency you can think of and see if it rattles there cage. The company we were using was State Capital Financial in Florida.