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When Chapter 13 bankruptcy is the best debt consolidation plan

Debt consolidation can help some people in Oregon to combine all their debts into one manageable monthly payment. One common method of consolidating debt is through a home equity loan. This method is helpful to those who have good credit and plenty of collateral. However, taking on more debt is a temptation to many who have more income at their disposal as a result of this type of debt relief. In addition, even if a person is able to pay off all debts with a single loan, the length of time required to pay the new debt is usually much longer than that of the original loans.

A debt management company may also be a source for consolidation options. Oregon law requires these debt management institutions to be registered with the state, and fees charged for services are set and regulated by law, as well. The Oregon Division of Finance and Corporate Securities cautions against seeking out these services without first researching any company thoroughly.

An individual who is not able to consolidate through other methods or pay the minimum amount on debts may be able to file for Chapter 13 bankruptcy. The debts are consolidated under this plan, and the amount of the monthly payments is fixed based on the person’s ability to pay, including all income and expenses. The payment plan is typically set for 36 to 60 months. The Oregon State Bar lists the requirements and limitations of Chapter 13 bankruptcy, as well as its benefits and what a person can expect from the process.

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