| Legal Protection: |
Yes - Automatic Stay immediatley stops collections/lawsuits |
No legal protection — Creditors can still contact/sue you |
| Court Supervision: |
Yes- Repayment plan approved and enforced by court |
No- Relys on Creditor Cooperation |
| Creditor Cooperation: |
No- Bankruptcy Plan is binding even if creditors object |
Yes -Creditors must agree to terms |
| Debt Discharge: |
Yes- Some unsecured debts can be discharged |
No- Typically, all debts must be repaid |
| Fees: |
All fees and costs must be approved by the Court |
May include high fees and hidden charges |
| Impact on Credit Score: |
Negative initially, but improves as plan is completed |
Less damaging, but missed payments or defaults can hurt credit |
| Foreclosure/Repossessions: |
Stops foreclosure/ repossessions and garnishments immediately |
No protection-lender can proceed with foreclosure reposessions or garmishments |
| Repayment trems: |
3-5 years |
Varies- usually based on total debt |
| Total Debt Repaid: |
May pay less than 100% of unsecured Debt |
Often repays 100% of debt plus interest Depends on negotioated terms |
| Public Record: |
Yes |
No |
| Tax Implications: |
No |
Can be taxed on any forgiven debt |
