Consider All of Your Options
Debt Settlement Firms
If you face mounting debt you cannot manage, you have a number of choices available to you. Like most people, you've probably seen commercials on TV and radio urging you to pay a debt settlement company to help you rid yourself of debt by negotiating with your creditors to settle your debts for a lower amount.
While this may sound good at first, before you retain a debt settlement firm, consider these possible negative repercussions:
- Once you've paid off the lowered amount, it's reported to credit agencies as settled rather than paid. This can negatively impact your credit score.
- There is no guarantee that, after retaining a debt settlement firm, your creditors will agree to lower your debts.
- Unfortunately, there's a high non-completion rate with debt settlement companies. If you drop out of the process, or if creditors decide not to settle, you still owe the creditors and you still owe the debt settlement agency fees. So, you end up owing more than you did before calling the agency.
- Debt agency fees can be high.
- These agencies may or may not stop harassing creditor calls.
To learn more about your options, contact Denver, Colorado bankruptcy lawyers Townsend and Fiore, LLC at 303-586-2963 or toll-free at 877-237-9323 for a no-cost initial consultation. You can also contact us online.
Debt Consolidation Companies
Debt consolidation companies are another popular means of attempting to solve debt problems. Like debt settlement agencies, they can also have negative side effects worth considering:
- They often engage in what's known as "debt-shifting." In other words, you still owe the debt, but the owner of the debt changes and payments may be lower because they are spread out over a longer period of time.
- Because payment periods are typically longer, you can pay significantly more in interest over time.
- Credit may be freed up, making it tempting to use your credit cards and dig yourself deeper into debt.
- Many of these companies are outside of Colorado. You will never see anyone face-to-face.
- They might or might not stop creditor harassment.
Chapter 7 and Chapter 13 Bankruptcy
Like the other options, bankruptcy has its pros and cons, too. However, with Chapter 7 liquidation bankruptcy, you can get a complete discharge of your unsecured debts. With a Chapter 13 reorganization bankruptcy, you can keep significant assets, make affordable monthly payments to pay off your debts and stop foreclosure on your home. With both forms of bankruptcy, you stop harassing creditor phone calls. Perhaps best of all, once you complete the bankruptcy process, you have closure. You are done dealing with the debt and payments.
The Bottom Line
You should get the advice of a professional before choosing any debt relief option. The stakes are high. You want to make the choice that's right for you and your circumstances.
Call us to arrange a face-to-face appointment with a knowledgeable bankruptcy attorney at no charge to you. Gather the information you need to make an informed decision.
Call us at 303-586-2963 or toll-free at 877-237-9323 for a free consultation. You can also contact us online. Please ask about our affordable, flat fee payment plan. Se habla español.
BAPCPA disclosure: This is a federally designated debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.