Although we’ve written about it in our past blog posts (here), it’s still heartbreaking to listen to new clients tell their stories with debt consolidation/settlement companies. Just recently, we took on another client who was in a debt consolidation (with a national company that advertises relentlessly) plan for about 1.5 years. He paid them more than $500 a month during that time. They settled one of his lower account balances, then nothing else was settled, the harassment continued, his credit score dropped like a dead weight, and the $500+ a month payment was still too difficult for him to maintain. When he decided to sign up for the debt consolidation service, bankruptcy was something he was going to avoid at all costs. In fact, bankruptcy was not even thought of as an option. He thought that he had found his bankruptcy free solution. But he is not alone, we talk to someone like him multiple times a week. But we still cannot get used to the predatory nature of these companies. How they prey upon the poor, scare them about bankruptcy, and then take their money with nothing to show for it in most cases. In all honesty, it’s all getting pretty old.
What would have happened if he had filed bankruptcy 1.5 years ago? He would have saved his $500+ a month payment to this company, which he could have used to save for his retirement…or invest in some business or stock. His credit could be near or higher than 700 by now. And he could have been preparing himself to buy a house in the near future. In short, he could have had a REAL solution…instead of depending upon the false promises of these multi-billion dollar debt settlement/consolidation companies. What is sad is that people are not doing their due diligence about bankruptcy or about these companies and what they represent. You would think that with the current amount of information available on the internet, it would be pretty simple to find some resources that would debunk these companies and also shine a light on the actual positive impact that bankruptcy can have on bad credit, that these companies would be going out of business (like loan modification companies a few years ago)…but they seem to be going on stronger than ever.
If you are in debt and need help, your first consultation should be with an experienced Los Angeles bankruptcy attorney. Our bankruptcy consultation is free. And what people do not seem to understand is that when we have a bankruptcy consultation, we are focused on your best interest…as lawyers we have a duty to do so (and we take that duty seriously). We constantly tell people not to file bankruptcy when it is not in their best interest to do so. So don’t be afraid and think that we will pressure you into something that you should not do…we will give you the facts and we can discuss all of your options (bankruptcy and non-bankruptcy) in detail.