Chptr 13 vs cccs vs handling it on my own

[Lexy1969]

I have had consultations with attorney and cccs counselor. Attorney wasnt sure if I should file 13 since the new laws are so vague on whether the 5 year repayment term was a multiplier or a set term.

Credit Consumer Counseling didnt give me a secure feeling either.

My situation is my income has dropped temporarily over the past 4 months and my expenses got out of control. I owe around 35k in credit card and unsecured loans, and 25k in state and federal taxes. I cant start making payments for 60 days and Im behind on all 9 credit accounts and on taxes.

Any advice? Can I handle this on my own? Will these accounts just charge off since Im 60 days behind and cant pay for 60 days?

Thanks

[no_it_all]

Ok, you owe taxes...those are not going to disappear. You may work out an offer in compromise, to wit:
* Doubt as to Liability - Doubt exists that the assessed tax is correct.
* Doubt as to Collectibility - Doubt exists that you could ever pay the full amount of tax owed.
* Effective Tax Administration - There is no doubt the tax is correct, and no doubt that the amount owed could be collected, but an exceptional circumstance exists that allows the IRS to consider a taxpayer's OIC. To be eligible for a compromise on this basis, the taxpayer must demonstrate that collection of the tax would create an economic hardship or would be unfair and inequitable.

That could possibly help you lower your tax liability. The credit cards will be charged off...Doesn't really mean anything...the credit card people can still collect. Do you have any assests? I would probably try to find another attorney, one that understood how bankruptcy works. Good luck to you...

[SinkingFast]

Everything that No_It_All said is true about the taxes.

Highly doubtful that you'll get the taxes completely erased. You may get something reduced, but, you'll most probably have to pay. And the IRS gives up to 10 years to repay tax debt. The problem with that, is the whole time you're in an OIC, the penalties and interest continue to accrue. So, if you go for a longer term, you'll wind up paying WAY more. It's not like adding a year to your car loan being just a few hundred dollars difference.

If you go with a Credit Counseling Agency, they have set agreements with the major Creditors. In our case, when CCCS of Atlanta figured our DMP, the balances remained the same, just the interest rates varied. In some cases, we had better interest rates at the time than CCCS had arranged with the Creditor.

The upside of a DMP, if you make your payments on time, all the time, you'll be outa debt in 5 years or less.

The downside, there's management fees, your credit rating will suffer as much as if you'd filed BK, some Creditors don't work with CCA's so you have to make additional payments outside the plan, and if you're ever late, you can get booted from the program. Also, unlike filing BK, there's no automatic stay protection. The creditors can continue to call you, bill you, hassle you.

Like NIA said, you need to see other attnys. The attny you spoke with is evidently not attending the New Law BK seminars and training courses. There's been a tremendous amount of education and training for Judges, Trustees, and attnys going on since the Law changed.

Here's a link for you:

http://www.usdoj.gov/ust/

You might also read up about the New BK Law at http://www.nolo.com as well.