DEBT FACTS

1. Do Nothing

2. Chapter 7 Bankruptcy

3. Chapter 13 Bankruptcy

4. Debt Settlement

5. Debt Consolidation Loans

6. Debt Consolidation Home Equity Loans

Unlike so-called “Debt Settlement Companies,” Bankruptcy Law Firms and Credit Counseling Agencies, TRIVIUM FINANCIAL SOLUTIONS does not try to fit you into the one program they offer (regardless of whether its in your best interest). Instead, TRIVIUM FINANCIAL SOLUTIONS will let you know the advantages and disadvantages of each approach, and let you make the decision.

DOING NOTHING. If you have no income, (or only income that creditors can’t touch, such as Social Security) no property to lose, and do not mind continuing calls from creditors, then DOING NOTHING may be the option for you. (We don’t make any money if you choose this option – but if this is in your best interest, we’ll let you know.)

A CHAPTER 7 BANKRUPTCY. If you qualify for a Chapter 7, you can “discharge” (effectively eliminate) most of your debts without having to repay anything. Not everyone qualifies for a Chapter 7. Under the new bankruptcy law, all debtors must take a "means test." The bottom line is that if your income is above the average for your state, OR if you can afford to pay more than $100 per month to your creditors after all of your reasonable expenses are taken into consideration, then you will probably not be allowed to file a Chapter 7. Regardless of whether they qualify, many people want to avoid a bankruptcy for their own personal reasons.

CHAPTER 13 BANKRUPTCY is a solution wherein you make monthly payments to a court appointed trustee for a period of 3 years if your income is below the state median, or 5 years if it is above the state median. The amount you pay is as much as you can afford to pay – meaning that your reasonable living expenses are subtracted from your income, and everything left over goes to the trustee..

A Chapter 13 may be your best option if:

(a) you owe large tax debts that cannot be eliminated by a Chapter 7 and you want to stop the interest and penalties by forcing the IRS to take a payment plan;

(b) you own real estate that is being foreclosed on; or

(c) you don’t qualify for a Chapter 7 and you want to stop lawsuits against you.

DEBT SETTLEMENT is for those who can afford to pay something toward their debts but cannot afford the entire amount; and for those who do not qualify for a Chapter 7 but do not want the hassle of a Chapter 13.

DEBT MANAGEMENT (CONSUMER COUNSELING). If you are current with your monthly payments or just barely behind, a Debt Management Plan may reduce the current interest rate on your outstanding debts, reducing you monthly payment and allowing you to pay off your balance over a much shorter time period.

DEBT CONSOLIDATION LOANS. Debtors with near-perfect credit may consider applying for a personal loan to consolidate their credit cards. These types of loans are typically offered by banks and credit unions. Consumers should be aware, however, whether or not the loan will benefit them. Pay close attention to the interest rates offered, as well as the term of the loan.

DEBT CONSOLIDATION HOME EQUITY LOANS. Again, this type of consolidation loan may be appropriate for debtors with perfect credit. Unfortunately, there are two major disadvantages to applying unsecured debt amounts to a secured debt on a piece of property. One: falling behind on credit cards can result in, at worst, legal judgments leading to wage garnishments. Falling behind on a second mortgage payment, however, can lead to a foreclosure on the property. Two: a review of the amortized payment schedule on the loan documents may reveal, in nearly every case, that a borrower may pay more in interest and fees over the term of the loan than they would by continuing to pay their credit card bills each month, regardless of the new rate. This is caused not only by the fees due at closing but also by the extended term of most mortgage loans.

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