Beware Credit Counseling Companies

Many credit counseling companies run ads on TV claiming that they can reduce your payments or negotiate debts without the consumer filing bankruptcy. This sounds attractive to many people because they think it will help them get their debt under control without going through the bankruptcy process. What many consumers find, however, is that the claims made by these companies are wildly exaggerated; in fact, many consumers are worse off after using these companies than they were before. A bankruptcy attorney can discuss your options and can guarantee that they will find a solution once and for all for your overwhelming debt.

The biggest problem with these companies is that they have no leverage to negotiate with creditors to try to lower payments. In many cases, they simply consolidate debt, allowing a consumer to make only one payment each month instead of several different ones. But, of course, these companies tack on a fee for their services without actually lowering any bills. Ultimately, the debtor pays a fee for the convenience of writing one check each month.

If this is all the consumer needs, there may be options available to take out a debt consolidation loan at a lower interest rate than they are currently paying. This actually might have a benefit for people, especially if the interest rate is substantially lower than their current rates. You can talk to your bank about taking out such a loan, as many banks and credit unions in the St. Louis and St. Charles area offer these types of loans. Of course, if you are deep in debt or have poor credit, it may not be possible to get favorable rates for this loan. And if you are extremely deep in debt, consolidating debt might just be delaying the inevitable.

Before seeking the help of a credit counseling agency, be on the lookout for signs that this could be a scam. The biggest sign are claims that sound too good to be true. If a company claims they can instantly repair your credit, for instance, the company is almost certainly a scam. Aside from correcting errors on your credit report, there is no way to instantly repair your credit. Another unrealistic claim is that they can substantially reduce debt payments or wipe away debt entirely. The only sure way to discharge debt is through Chapter 7, not loan consolidation or credit counseling.

A bankruptcy lawyer can discuss your options during a free consultation to help you decide on the best route for you and your family. With strict ethical rules, you can be sure that an attorney only has your best interests at hand and is not trying to pressure you in filing bankruptcy.

At Westbrook Law Group, we understand how difficult it can be to deal with serious debt problems. We know that bankruptcy is the last thing someone wants to do, but it can be the right decision. If are struggling to make ends meet and are sick of dealing with harassing debt collectors, we can explain your options. Contact Westbrook Law Group today for a free consultation with an experienced bankruptcy attorney.

Are you trapped in debt? Contact Westbrook Law Group

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