A Ft. Lauderdale Bankruptcy Attorney Laments: Debt Consolidation Companies – Myths & Woes – Or Mostly A Rock?

As a seasoned bankruptcy attorney, it irks me to see the horse pucky in the numerous debt consolidation ads lately.  “Credit Card Hardship Relief Program”.  “Debt Relief is Just a Few Clicks Away”.  “You May Be Eligible For Special Offers”.  None of which is really true.  Sorry, but there is just no free lunch, absent hitting the lottery.  Oh you will “qualify” - for a hefty monthly payment “program”, but it will be on terms your various credit card companies dictate, and that is, IF, they will cut you even a small break on their terms and conditions you are legally bound by.  I assure you it will not be the debt consolidation company you might sign up with, waving some magic wand.

“Can you imagine what being debt free is like?” one ad touts.  It sounds great, almost effortless.  So you sign up.  You will pay an upfront fee.  You will enter into either a Debt Management Program (monthly payments for 2 - 4 years) or a Debt Settlement Program (stop paying creditors altogether, build up an escrow fund, hope there is enough money to settle the debt when you’re sued!).

A close look at one debt companies’ website estimates only a total 20% savings over the 2 - 4 years, if successfully completed, plus the company takes a monthly fee.  If something happens and your payments stop - bingo - the “program” is off and unpaid principal, interest and penalties are added back in and you, still, owe it all.  If you are on a Debt Settlement Program and a credit card company will not accept the lump sum amount you have escrowed, they are free to sue you at anytime, and they will win a money judgment, which means bank accounts and wages can be garnished and personal property can be seized, without warning or notice!  Debt companies are not law firms and cannot represent you in court, so when you are served with the Summons, you’re on your own.

Alternatively,  ALL that money in the paragraph above COULD have all been money in your pocket, had you simply filed a chapter 7 bankruptcy with a Ft. Lauderdale bankruptcy attorney.

No one wants to file bankruptcy.  I’m guessing even Mr. Trump didn’t want to (on several occassions) file bankruptcy, but he realized as a business decision, it is most times by far the better way to solve serious money problems.  Said another way, it’s not a moral decision, it’s an economic decision.  With a bankruptcy filing, you are quickly, with finality and with no uncertainty, legally relieved of unsecured (credit card, medical  and uncollateralized) debt.  If you feel morally obligated to pay back creditors once you are back on your feet (thanks to your fresh start, as now you have NO DEBT), certainly you are free to do so, several times over if you desire.  Although candidly I’ve never seen that happen in 35 years as a Ft. Lauderdale bankruptcy attorney.

I just think, in all honesty, having experience in seeing all these scenarios play out many times, that if you weigh the pros and cons of the years long struggle, and that’s if you can keep up, for a debt payback or debt settlement plan, versus the simple, 4-month bankruptcy process (that you will be counseled and led through by a legal professional), which gets rid of the debt and wipes the slate clean for a fresh start, well, not to be flippant or insulting, but it’s just a no-brainer.

As a Ft. Lauderdale bankruptcy attorney who practices also in Dade and Palm Beach, I offer a free, confidential consultation, by phone or in person, that just might be worth its weight in gold.  To an individual, or a couple, drowning in debt, I offer a lifeline that will relieve all your money stresses and give you a life again.  Having handled well over 1,000 chapter 7 bankruptcy cases and not remembering a downside to any, if you are in this unfortunate money circumstance, I hope you will consider this alternative to a debt consolidation company.  I assure you, I take care of my clients and with my experience you will be in very good hands, start to finish.

If you are drowning in debt you should consider it.  As Mr. Trump opines: “What have you got to lose?” (nothing but your bills).

Steve M. Glerum, Esq., Ft. Lauderdale Bankruptcy Attorney