Why People Fall Out of Debt Settlement
Debt Settlement Agreements Don't Always Lead to Reduced Debt
Every year, thousands of consumers who desire to reduce debt through responsible means enter into debt settlement agreements with debt reduction agencies. And each year, thousands of consumers choose to leave the terms of their debt settlement agreements, which can leave them:
- With the same debt they had before they hired the debt settlement company
- With additional debt from the high-cost fees the debt settlement company charged them
How does this happen?
Debt settlement companies most often collect their fees upfront, so that the money they collect in the initial stages of the debt-reduction process can go toward their fees, not the reduction of debt. Sometimes the first 18 months of payments made go towards fees, not debt. Later, if a consumer decides to leave the debt settlement arrangement, the debt reduction agency has little incentive to encourage continued participation because it's already been paid.
There is a better way. Chapter 7 and Chapter 13 bankruptcy can reduce debt effectively while avoid thousands of dollars in fees to debt consolidation companies. In addition, by filing for bankruptcy, you can avoid lawsuits with creditors, halt wage garnishment and prevent bank levying.
Before deciding on which path to take in your road to debt reduction, consult with an experienced attorney who can help you determine how to maximize debt reduction, reduce risk and reduce debt-reduction expense. For a no-charge consultation with an experienced Beaumont, Corona, Riverside, San Bernardino, Chino, Orange, Rancho Cucamonga and Palm Springs office debt reduction lawyer, contact one of our offices.
Contact Us
The Corona consumer bankruptcy attorneys at Sobti Law Group offer free consultations, are available for Saturday appointments by request, and speak English and Spanish as well as Armenian, Russian, Arabic, Persian, Hindi and Punjabi. To contact a lawyer at the Orange law firm of Sobti Law Group or U.S. Law Center, call 888-627-8013.
