Alternatives to Bankruptcy in Illinois
Chicago Illinois Bankruptcy Lawyer
Often, someone who is overburdened with debts will be tempted to enter into an agreement with a "debt relief company". These companies claim to be able to negotiate with creditors to erase the bulk of your credit card debts through “tough bargaining”.
What they actually do is take and hold all of your normal monthly payments to your credit card companies in their account (minus their cut) month after month until they have a substantial amount, then call a card and say, “We can give you three thousand now instead of the ten thousand due on this card if you erase the rest of the debt owed.” Needless to say, the lender rarely agrees.
"Consumer Man" on MSNBC wrote the following in regard to these companies:
Some companies now claim they can negotiate a one-time settlement with all of your creditors that will reduce your principal by as much as 50 to 70 percent. By doing this, they say, your monthly payments will drop dramatically.
"That is virtually impossible under any circumstances," says Travis Plunkett, Legislative Director of the Consumer Federation of America. That’s why CFA warns consumers not to use debt settlement programs. "They are promising something they can’t deliver," Plunkett says.
The majority of these folks end up filing for bankruptcy, in any event, of course after these companies take their cut. Moreover, filing and completing the short bankruptcy process allows one to start fresh and create a relatively new credit identity rather than trudging through the mud of the former debt burden for months on end.