Wall Street Journal says “Beware of ‘Debt-Relief’ offers”

I always try to warn people to avoid the empty promises of debt relief and debt settlement companies that require up-front fees and imply that you’ll only need to pay pennies on the dollar.

Now, the Wall Street Journal is warning people as well in a recent article (“Beware of ‘Debt-Relief’ Offers“).  The article notes that consumer are more vulnerable than ever to the tempting sales pitches of debt relief and debt settlement companies.  However, the article also notes that complaints against these companies are on the rise and that lawsuits against debt relief companies by state attorney generals have been increasing as well.

The problem with debt relief agencies is that the solution they offer is really only appropriate for a very small percentage of consumers.  However, they’re just interested in taking your money (which they require you to give them up front).  They’re not interested in telling you if you do fit in that very tiny percentage.  In other words, the debt relief business is an attractive vehicle for unethical and unscrupulous business people for essentially stealing money from consumers in dire straits.

Other disadvantages of using a debt relief agency are that you can be sued by your creditors, and also that many loans that are forgiven in the process are viewed by the IRS as income, which means you’ll incur tax liabilities.  (By contrast, if you file for bankruptcy, you cannot be sued by creditors and you do not incur any tax liability for reduction in the amount you ultimately end up repaying.)

If you’re facing financial troubles in New York, a good first step is to have a free initial consultation with an experienced and trusted New York bankruptcy lawyer.  A good lawyer will inform you of all of your options–bankruptcy and alternatives to bankruptcy.

Please contact me to set up a free initial consultation to discuss your situation and get answers to your questions.

For additional reading on the topic of debt relief agencies, see the following:

• Don’t believe the hype: Credit counseling services and debt settlement companies
• Debt management and debt settlement companies invade Twitter-sphere!
• Debt settlement company exposed by ABC News
• Debt settlement company files for bankruptcy!?

Go to www.nybankruptcy.net to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.

Debt management and debt settlement companies invade Twitter-sphere!

Since setting up a Twitter account (http://twitter.com/nybankruptcynet), I’ve acquired a number of followers who are both nice and interesting.

However, there are two categories of Twitter followers who are more persistent than others and who I block every time:

1. Representatives of the oldest profession, and
   
2. Debt settlement and debt management companies

(I apologize for having to put #1 in the same list as #2 as it clearly besmirches the reputation of #1.)

I thought perhaps it was worth taking a closer look at these persistent harassers in the Twitter-sphere.  In deciding which category to focus on, I’ve determined that my New York bankruptcy lawyer background makes me primarily qualified as a commenter on category #2, i.e., debt settlement and debt management companies.

Now let’s take a look at some of my recent Twitter “friends” (so that you don’t have to):

1.  “government_loan” and “_debt_solution” and “debt_secured_”:  It turns out these three are related.  Their feeds consists entirely of cliches and platitudes that most likely are being copied from a proverbs website somewhere.  (Or even more likely, are being posted by an automated software program.)  A click through to the link they provide takes you first to a page that offers a free book of “7 Sexy Twittering Secrets.”  (See?  Not so far off from Category #1 after all.)  And a link at the bottom to “Debt Consolidation Government Loan” takes you to “The Expressway to Freedom from Debt.”  No names of contact people or even of a company name.  Sure, let’s give them control of our finances.  What could go wrong?

2.  Debt1Solutions:  A combination of random posts that are either quotes on the topic of debt or else inane comments about new blogs, e.g., “Blog up about Michael Jackson doctor’s debt problems, could this explain his actions. Debt problems will drag you down.”  Um, thanks.  Most disturbing about Debt1Solutions page is that in the “Website” field, all I can see is “http://[unsafe l…” and the link has been rendered un-clickable by the wholesome folks at Twitter.

3.  bankruptcybgone: Lastly is a Twitter follower who lands right in the middle of categories #1 and #2 named “bankruptcybgone.“ Sounds innocent enough, but its Twitter page is accompanied by a headshot of a rather buxom young woman.  No accompanying links.  Not sure what to make of it other than I don’t think she’s going to have the desired affect on your finances that you may be seeking.

All of this is hopefully telling you what you already know about debt settlement and debt management companies.  Namely, that they’re bad options.

If you are seeking thoughtful, intelligent, strategic help with bankruptcy in Manhattan, bankruptcy in Brooklyn, bankruptcy in Queens or bankruptcy anywhere else in New York, please feel free to contact me for a free initial consultation.  I’ll answer all of your questions and lay out all of your options so that you really do have a “debt solution,” don’t need a “government loan” and are able to make “bankruptcybgone.”

Debt settlement company exposed by ABC News

“We’ll help you settle your debts for pennies on the dollar.”

Sound familiar?  Maybe you’ve seen these Credit Solutions ads on TV, on the internet or even in the New York subway.  ABC News recently ran a segment where they investigated Credit Solutions and the debt settlement industry, which revealed that the debt settlement company is essentially running a scam.

If you’re struggling with large credit card debts, promises like this that offer to quickly reduce not just your debt but also your stress level most likely sound very appealing.  The problem is that debt settlement companies like Credit Solutions (which happens to be the largest debt settlement company in the U.S.) aren’t able to actually help most people.

Of course, that doesn’t stop them from taking your money.  And they take it up front.  As the ABC News video shows, too many people have given money to debt settlement companies like Credit Solutions and then never hear from them again.  What’s worse is they tell their customers to stop paying their credit card bills (which also must sound very appealing).  So if you’re the customer already feeling financial stress, you’re out a couple thousand dollars and you still have all your credit card debt, except that now it’s worse due to accumulated interest and late fees.

Also, they’re not very transparent, so you’re taking a huge risk when you put your faith in one.  Sure, they do help some people.  But they’re cherry picking the best clients and ignoring the rest.  So even if you heard from a friend who had a positive experience using them, just remember that’s the exception to the rule.  It in no way means you’re going to get the same result.  So why take the risk?

Using a debt settlement company is penny wise and pound foolish.  If you’re looking for alternatives to bankruptcy in New York, make sure to deal with it properly from the start.  Otherwise you’ll likely end up spending a lot more money and time dealing with it down the road.

Get in touch to sit down and talk with us for a free initial consultation to learn all of your options–bankruptcy and non-bankruptcy– for dealing with debt.  And never pay anyone up-front to help you settle your debts.

Debt settlement company files for bankruptcy!?

In the Irony Department, today a debt settlement company called Debt Relief USA filed for bankruptcy, according to an article in the Dallas Morning Herald.  And the further irony is that many of the debtors who turned to Debt Relief USA for help are now creditors, while Debt Relief USA is the debtor!

This of course begs the question:  If they had so much debt, why didn’t they take the same medicine they prescribe for their customers and go to a debt relief agency themselves?

The answer is that debt settlement companies are generally not a good option for most people.  And in the case of Debt Relief USA, they may be downright scamming their customers.  A search on Google quickly reveals that Debt Relief USA was already in trouble for shady practices, facing a lawsuit from the Illinois Attorney General and also entering into a settlement with the Georgia Governor’s Office for Consumer Affairs to pay back over $500,000 to clients as well as pick up a $40,000 tab for administrative costs incurred.

So now Debt Relief USA is enjoying all of the protections of the bankruptcy laws while its clients are learning first hand about the benefits of bankruptcy–but from the other side of the fence.

The lesson for New Yorkers facing financial problems is to find a good New York bankruptcy lawyer whom you trust.

• A good New York bankruptcy lawyer will always put your interests ahead of the lawyer’s own business interests.
• A good New York bankruptcy lawyer will help figure out if there are non-bankruptcy options available to you.
• A good New York bankruptcy lawyer will help you save money.
• And a good New York bankruptcy lawyer will understand the unique circumstances of your situation and be able to help you figure out when bankruptcy is your best option as well as how to make the bankruptcy laws work in your favor.

If you are facing debt problems in New York and are looking for answers to your questions, please don’t hesitate to contact us for a free consultation.