Legal Question in Credit and Debt Law in Minnesota

There are several alternatives:

a. Do nothing, make payments

b. Try to borrow your way out of the problem with some sort of loan consolidaton

c. Try debt settlement co.

d. Try debt management co.

e. Ch. 13

f. Ch. 7

Debt settlement companies take monthly payments from you, tell you to not pay your bills, and then when your credit is trashed they claim to try to offer the creditors payment at a discount. My belief is you can do this yourself, you do not have to pay some company in FL or CA or wherever $1500 to do that. I have LOTS of bankruptcy clients who were in a debt settlement company for six months or a year, and got tired of being sued.

Debt management companies, on the other hand, can be legit. Call Lutheran Social Services or the Village or Family Means and have a face to face meeting with a counselor. Generally they set up payment plans at 2.25% of the outstanding balance and an interest rate of 9%.

Ch. 13 is a payment plan bankruptcy; a FULL PAY 13 would cost you about $835 a month for 60 months.

Ch. 7, of course, simply wipes out the debt.

No way to tell what is "best" for you without knowing way more. However, Congress requires pre-bankruptcy credit counseling, so I suggest you go to the list at: http://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm and contact one of those listed.