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Chapter 13 Bankruptcy vs Debt Settlement

debt settlementAt my practices in Brooklyn and Long Island, I have represented thousands of people through financial crisis, and although the individual set of circumstances differ, there are a few common themes.  In fact, I’ve found that when most people are faced with mounting bills and desperately want to get out of debt, they want to pay!  They first start to haphazardly send in minimum payments – maybe a few dollars more – until they come to the realization that their debt is not decreasing and all of their hard earned money is going to interest payments and late fees. Their desperate search for a solution then turns toward a comparison of Chapter 13 bankruptcy and debt settlement companies. There are real differences between debt settlement and Chapter 13 bankruptcy. The trick to learning what is in your best interest is getting a free consultation with a qualified attorney and getting past the myths about bankruptcy and analyzing the two different options.


Nicole R from Suffolk County was dead set against bankruptcy until she got tired of throwing away her money and was driven into my office – Doyaga & Schaefer.  Nicole and her husband had previously filed a Chapter 7 bankruptcy.  After their bankruptcy, they had a child and bought a home.  But when Nicole lost her job as a video editor, their family amassed $70,000 in credit card debt.  Nicole was tough and had lots of great questions.  We discussed all her concerns and she ultimately made the decision to abandon her effort through debt consolidation and file for Chapter 13 bankruptcy.  Below are some of her concerns:

How Can Bankruptcy Change My Life?

How Can Bankruptcy Change My LifeFiling for bankruptcy is a major step for individuals to take.  While there’s a lot of myths and misinformation about the effects of bankruptcy, I’ve seen that it change the lives of my clients for the better.


For example, Elena K’s was receiving call after call from debt buyers such as Asset Acceptance, Midland Funding and Portfolio Recovery.  These companies were doing what they do best: charging interest and fees and aggressively attempting to collect the debt. One of the creditors even went so far as to hire Malen & Associates from Westbury to sue her, while another creditor obtained a judgment with the New York City Marshal Bruce Kemp. Confronted with creditor calls and a garnishment, Elena’s life was as stressful as it could get.

 The married mother of two was worried how much her life would change if she filed for bankruptcy. Her son needed a speech therapist and her daughter loved gymnastics. She wondered if bankruptcy court force them to stop those activities.

How Can I Save My Apartment?

BIg Apple BankruptcyRosalyn T. and her husband lived on the upper east side for over 30 years. They called home a beautiful apartment in one of the world's most expensive zip codes, 10028 which was subject to New York City rent controlled laws! When she consulted with Doyaga & Schaefer about filing for bankruptcy she only wanted to know one thing, could her landlord use bankruptcy to kick her out of her apartment. Thankfully, the answer was no. 

When Two Jobs Aren't Enough

Big Apple BankruptcyElizabeth N. lives in Hicksville, Long Island and made a career out of helping people as a home health aide and a baby sitter. If working two jobs wasn't enough the divorced mother of three raised her beautiful children in Nassau County. Elizabeth sacrificed a lot for her kids and worked hard but after some bad luck she found herself $64,000 in credit card debt and at the mercy of aggressive creditor calls. 

She harbored the familiar natural fears about the idea of filing for bankruptcy, public embarrasment and loss of credit. But when Chapter 7 wiped away her debt and ended collection actions by the likes of Cohen & Slamowitz, Hann Financial Services and LVNV Funding, Elizabeth exclaimed, "Filing bankruptcy was the best decision I ever made." 

What Do I Do If My Creditors Refuse to Work With Me?

Working with creditos and bankruptcyBarry W. is a single guy living in Holbrook, Long Island and working as an ambulette driver. He is the perfect example of how credit card debt can creep up on you and become unmanageable before you know it. Most people cannot understand how one day you can handle your bills and then it only takes a minor misstep for the debt and interest to pile up.

Continuing Legal Education

One of the partners at Doyaga & Schaefer, David Doyaga, teaches a Continuing Legal Education (CLE) course every year at the Brooklyn Bar Association. The topics lectured on range from bankruptcy basics to recent developments in bankruptcy law. This year some hot topics included some interesting developments about some possible imminent changes to discharging student loans in bankruptcy.

The Federal Reserve Bank of New York reported that the total outstanding student loan debt in the United States on 2012 totaled $902 billion. Student loan debt is extremely common and can become incredibly burdensome. Typically student loans cannot be discharged and Debtors that try to often fail to meet the legal test (called the Brunner test) for undue hardship. Historically, this test has been nearly impossible to meet. There has been some movement among the circuit courts away from strict adherence to the Brunner test, namely in the 7th Circuit and the 9th Circuit but there is still a long way to go before a Debtor can discharge student loan debt in full and without meeting the high burden of the Brunner test.  

How Can Bankruptcy Affect My Credit Score?

BankruptcyDavid B is a 61 year old materials/manager engineer who lives in Nassau County. After going through a divorce and loss of a job, he found himself with nearly $250,000 in credit card debt.

How did he build up so much debt? It all started in 2003 when he and his wife split and finally divorced. Immediately after he was divorced he suffered a few, slow years of self employment. As his income decreased he began to live off credit.

One day he was regretfully notified that one of his Chase bank accounts was frozen by Melan & Associates. As a judgment creditor they had a legal right to put a hold on his personal bank account. After working hard for 30 years he felt “powerless.”

Calvary Portfolio Services?

Calvary Portfolio Service

Sophia M. came home to her house in College Point Queens, New York one day to find a piece of paper stuffed in her door. It was a collection action, actually a summons & complaint, on behalf of a company called Cavalry Portfolio Services. Sophia's heart dropped. Who is Cavalry Portfolio Services and why are they starting a lawsuit? She nor her husband Bobby ever had a credit card with a company with that name. How could she find out who they are? Sophia read the complaint and apparently Cavalrt Portfolio Services bought the debt from one of her creditors. So upset she waited for Bobby to get home from work so they could discuss their options. 
Sohpia & Bobby decided they needed to pick a bankruptcy attorney. They heard about the attorneys at Doyaga & Schaefer and needed to find out what their options were when it came to Cavalry Portfolio Services. Quite honestly Cavalry Portfolio Services was only one of their problems. After raising four children and getting laid off a few times Sophia & Bobby amassed $92,746.96 in debt. They desperately hoped the bankruptcy attorneys would help them with a Chapter 7. 

I Was Summoned To Appear In Bankruptcy Court!

i was summoned to appear in courtAll of the usual debt buyers, like AFFIL, LVNV and Midland Funding were coming after Warren G from Selden (11784). They hired aggressive attorneys, like Cohen & Slamowitz and Rubin & Rothman, and he was served with a summons & complaint. Not knowing what to do his anger started to get the best of him.

We All Need Help When We Are Sick

We All Need Help When We Are Sick

Barbara G. and her husband were retired for 12 years and happily living in Jamaica, Queens when they received the worst news of their lives, Barbara was diagnosed with Cancer. There were dedicated to beat the disease the same way they approached every other problem in their lives, together.

Living on income from pensions and social security what they did not count on was the extremely high costs of prescription drugs and doctors bills. As her treatments continued and new medical hurdles arose, their credit card bills started to mount. They were using their credit cards to pay for medical expenses because they simply had no choice.


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