Birmingham bankruptcy attorney Suzanne ShinnCountless people throughout the years have come into my office

Weak and Wearied,

Choking back tears,

Saying thru gritted teeth…..”I have worked SO HARD to pay back these creditors….” (voice trailing off)

“Only to find I have nothing to show for it! The creditors got ZERO!”

Or even worse:
I’ve been SUED! I thought I was doing the right thing!”

The pain and agony of working countless hours of overtime and extra jobs, to be able to make ends meet while a private debt consolidation company drafts several hundred dollars a month out of your bank account is only exacerbated enumerable times over when you find out that the “program” you have paid into has done nothing except take your money.

Pitfalls of Debt Settlement or Consolidation

Although there are reputable private debt consolidation programs out there, before making a final decision about partnering with one of those companies, you should be aware of potential pitfalls:

  1. The program can ATTEMPT to negotiate the balances or interest rate on the account, but there are absolutely NO guarantees.
  2. Negotiating with creditors generally takes several months before an agreement is reached. In the meantime the money you are paying into the program IS NOT being paid on your accounts. Therefore, your creditors will still report delinquencies on your credit history which will continue to damage your credit.
  3. Additionally, during this time, your account may be “swept up” in a block of delinquent accounts and sold to collection agencies all the while you are under the impression that you are paying on the account.
  4. The collection agency may not “like” the terms of the negotiations or payments and (this is the worst of all)…..


So here are some important considerations before you finalize your plan:

“People are destroyed for a lack of knowledge” and “There is wisdom in a multitude of counselors”. Both of these are Biblical quotes and we can all use more practical knowledge and certainly some extra wisdom.

A private debt consolidation program cannot provide you with court ordered protection so while you may be working hard to make money, your money may end up not working very hard for you in the end if you are not under the umbrella of protection that bankruptcy court provides.

Speaking with a knowledgeable attorney regarding your options in bankruptcy will likely provide the peace of mind (as well as a little knowledge and wisdom to boot) and you may be surprised with what you find out. Although filing chapter 7 straight bankruptcy or chapter 13 debt consolidation is not for everyone, you may find many have used one of these paths to bring about their financial peace. And, most importantly, if bankruptcy is not your best option and choosing a private debt consolidation program is, you will be more confident in choosing an agency to partner with. Contact any of our offices today if you have questions about your financial plans.


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