Debt Settlement Scam Lawyer
Many consumers turn to debt settlement or consolidation as a way to get out of debt. Unfortunately, many people pay thousands of dollars to the debt settlement firm only to end up deeper in debt with no assistance from the consolidation firm.
For most people with debt problems, debt settlement simply doesn’t work. Here are some of the reasons why:
- Debt settlement firms typically demand payment upfront and do not give any money to creditors until their entire fee is paid. As a result, you will continue to accrue late fees and interest fees while you are making payments to the debt settlement firm.
- Creditors are not required to deal with the debt settlement firm. Many refuse to negotiate and file a lawsuit against the debtor instead.
- The creditor can continue to harass you while you are making payments to the debt settlement firm.
- Even if the creditor does forgive a percentage of your debt, you will owe taxes on the canceled debt to the IRS.
When you file bankruptcy, you can obtain tax-free debt relief and the creditor does not have the right to say no. In many cases, our lawyers successfully sue the creditor for debt collection violations of the Fair Debt Collection Practices Act and provide you with debt relief without filing bankruptcy.
Free Case Consultation
If you can’t pay your bills, our lawyers can help you find a solution that actually works.
At Broadwater Law Group, in Fayetteville, West Virginia, our lawyers have a deep understanding of the protections that are available to consumers under both bankruptcy and the Fair Debt Collection Practices Act (FDCPA). With more than a decade of experience, our team has helped many people who were in difficult financial straits just like you.
Using a Debt Settlement Company Can Be Hazardous For Your Finances
Due to their low success rate and high costs, debt settlement companies should be avoided.
If you are struggling to repay debts, you know that your situation seems desperate. Because of your seemingly hopeless situation, you may think that turning to debt settlement companies that are advertised on late-night television would be a good idea. However, the truth is that many of these companies fall far short of their promises to help you with your outstanding debts, and leave you worse off overall.
The Federal Trade Commission highlighted this fact in a recent investigation into these companies. The agency found that debt settlement companies fail at reducing the debts of their clients 90 percent of the time. The reason for the high failure rate is found in the tactics used by these companies.
Nearly every debt settlement company advises its clients to stop making payments towards their debts, so the company can use this as leverage to force creditors to accept less than the full amount owed to settle the debt. Unfortunately, this bold tactic often backfires, making the client’s dire situation even worse.
Nearly every debt settlement company advises its clients to stop making payments towards their debts, so the company can use this as leverage to force creditors to accept less than the full amount owed to settle the debt. Unfortunately, this bold tactic often backfires, making the client’s dire situation even worse.
For one, many clients of debt settlement companies are hit with interest and late fees as soon as they stop payment as instructed, causing their outstanding debts to grow significantly. In addition, the nonpayment of the debt may cause creditors to take more aggressive (and unpleasant) tactics to collect the debt, such as filing a lawsuit or instituting foreclosure proceedings.
Even if the debt settlement company is successful in working out a deal with the creditors, clients can still be put in a worse position. They can face harassing phone calls, as creditors are under no obligation to stop, even if the client is making payments towards the debt. Additionally, if any of the debts are forgiven, the client can be hit with tax liability, as any debt that is forgiven is considered to be income under the law.
More on debt-related issues
Practice Areas
Our firm offers its superior representation to those in need of legal representation for debt-related issues such as:
For More Information About Debt Settlement Vs. Bankruptcy
Regardless of whether the debt settlement company is successful, just working with one can hit you in the pocketbook. They are for-profit enterprises that charge for their services, even if they are unsuccessful at reducing your debt. In many cases, the fee for their services is 15 percent of the debt owed or higher. There are options, but using a debt settlement company can be the worst possible option.
Unlike debt settlement companies, bankruptcy is a sure thing. Once you file bankruptcy, all foreclosure attempts, collection calls, accruing interest and lawsuits are immediately halted by the automatic stay. During the bankruptcy process, most of your debts are completely wiped away or reduced. However, unlike forgiven debt, it is tax-free. Additionally, compared with the costs of working with debt settlement companies, the fee to file bankruptcy is very reasonable.
If you are faced with mounting debts that you have little hope of repaying, you have options. An experienced bankruptcy attorney can go over your options with you and recommend the best way to get you back on your feet. Turn to our West Virginia debt relief attorneys for help. To schedule a free initial consultation, simply contact us online.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
This website contains legal information and is not intended to give legal advice or form an attorney-client relationship. Viewing this website does not create an attorney-client relationship with Broadwater Law Group.
