Do Not Be Taken in by Questionable Promises
There are a lot of businesses here in Arizona that take advantage of the pain and confusion people go through when they don't have enough money to pay their bills. They may tell you that debt consolidation is the answer to your problems — not bankruptcy.
Debt consolidation companies are in business to make money from your debt — without making the debt go away.
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When someone suggests debt consolidation, you need to ask why. A creditor might suggest it to make sure they will get fully paid. If a friend or family member suggests it, they probably have the idea that bankruptcy will ruin your credit for years to come. That is wrong.
- Debt consolidation puts all your debts into one loan. That means you may have one bill you cannot pay instead of many. When your debts are far beyond what you can pay, consolidation does not solve the underlying problem. Bankruptcy provides the debt relief you need.
- Debt consolidation companies say they will negotiate with your creditors. They claim they will try to get the amount you owe lowered or extend the length of your payments or lower the interest. Your creditors are under no obligation, however, to negotiate with you or the consolidation company.
- Chapter 7 bankruptcy eliminates your debts. No negotiations with credit card companies. No complicated loan forms to fill out. Your bankruptcy attorney can explain how Chapter 7 bankruptcy works.
- Chapter 13 bankruptcy allows you to work out debts. Unlike debt consolidation, creditors are obligated to come to an agreement that can include a lower repayment amount, lower interest and extended payment terms. And it provides you with an opportunity to rebuild your credit.
- You have a right to file bankruptcy. You do not have the right to force a creditor to be reasonable — even with a debt consolidation company. A bankruptcy court, however, can tell creditors to cooperate.
- Debt consolidation takes your money with no assurances. After paying them, you could end up with the same debt you started with plus the expense of a "service" that failed you.
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Do not be taken in by promises that a debt consolidation company cannot honor. Contact an experienced bankruptcy lawyer and find out how bankruptcy can help you get a fresh start. wantafreshstart.com helps people in the Phoenix and throughout Arizona find immediate bankruptcy help.
