Debt Management with Novadebt or Chapter 13 Bankruptcy?

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I have $ 90,000 in unsecured credit and have reached a point where I must either file Chapter 13 Bankruptcy (I don’t qualify for Chapter 7) or work with a Debt Management Company. Either way, I will have to pay 100% of debts, but both seem to give me the same benefit of freezing my interest rates and allow my to pay the debt in 5 years.
If NovaDebt is telling me the whole truth (haven’t seen a contract yet) then they will be able to save my credit rating. Does anyone know if this is really true? If not, then I feel safer filing for bankruptcy because that is where I would end up if I couldn’t meet the NovaDebt payments for some reason. I saw a antoher post that said my Credit Report will show I am in a Debt Management Program, but that would be removed once the plan is complete.
All my searches on the internet seem to indicate that NovaDebt is legitimate; does anyone have info on the contrary?
As far as monthly payments go it apprears that my NovaDebt payment will be about $ 200 more a month than bankrupcty payments. I am not too concerned about the extra $ 200 a month, but just want to make sure I am starting in the right direction if I will be paying more. As far as fees; NovaDebt says they charge $ 50 a month for this service – in the end that is actually $ 500 less than filing for Bankruptcy.
Any experiences, thoughts, or ideas are very welcome. I need to make a decision this weekend – yikes!

2 Comments
  1. Reply
    Elaine G
    July 17, 2011 at 6:48 pm

    Are you sure you don’t qualify for Chapter 7? And are you absolutely positive you’ll have to pay 100% of your debts?

    My experience with Ch 13 bankruptcies indicates that the trustee will require you to make payments for 5 years, but if your debts are not all paid at the end of 5 years, the remainder will be discharged by the courts.

    In either case you credit will take a hit…bankruptcy will stay on your record for 10 years from the date it was entered by the courts. The Debt Management info will stay seven years from your last transaction, which could very well be longer than 10 years. However, if you do not run out and get credit again, and pay responsibly for at least a year, your credit WILL improve enough to start testing the waters.

    I filed Ch 7 in 2005 and my score is 760, I have lots of credit…but don’t use it unless it’s an emergency. It’s not stopped me from getting 0% interest on CC’s, lower car payments, and home mortgage refi.

    Get more info before you sign on the dotted line….that’s my answer. You may not be getting the whole truth from NovaDebt, and you may not be getting the whole truth from one attorney. Ask a lot of questions, most attorneys have a free initial consultation. Good luck!

  2. Reply
    Miracles Happen Every Day.
    July 17, 2011 at 7:12 pm

    See http://www.esuperfind.com/lowermybills.phpp?id=hra0tt16koo9 the actual lending firm is an Experian company BBB approved so very safe.

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