Debt Reduction and Credit Counseling – High-Risk Binghamton Bankruptcy Alternatives

If you are currently struggling with financial issues, the very thought of filing bankruptcy is frightening, even though it could easily be the right decision. However, by choosing not to file bankruptcy, you are at risk of being victimized by criminals. To protect yourself, it is always best to seek guidance from a qualified Binghamton bankruptcy attorney like Laura Harris-Courage before making any decision regarding finances.

Debt Reduction Companies

A prime example is seen with debt reduction companies. These companies make bold promises of reducing debt by 30%, 40%, 50%, or even more. They advertise their services in such a way that everything appears legitimate when, in fact, they are scammers. Often, the fees these companies charge for their services are higher than what it would cost you to file bankruptcy.

In exchange for using the services of a debt reduction company, usually only one credit card company is dealt with, which agrees the payoff balance will be reduced. From the outside, this seems like an honest business deal, but debt reduction companies bank on the fact that most people in your situation will not negotiate to have the payoff amount lowered.

In reality, the majority of creditors have zero interest in working with debt reduction companies. In fact, if creditors discover that you are working with a company like this, most will become even more aggressive in their efforts to collect a debt. In their minds, not choosing the obvious solution of bankruptcy means that you have something of value not protected by bankruptcy. Therefore, the level of determination to secure any assets intensifies.

The bottom line is that debt reduction rarely is a good solution when facing major financial struggles. It is also a bad decision to work with a debt reduction company in trying to get debt reduced. The only time that this kind of company should even be considered is if you are a year or more behind on payments.

If bankruptcy is simply not an option, but you have sufficient funds to pay off creditors in full, it makes sense to reduce debt on your own. However, if you decide to go this route, be sure you get everything in writing from the creditors before any money is paid. You should also know that once an agreement is made, your creditors will notify the Internal Revenue Service. When that happens, any portion of unpaid debt written off by the creditors will be taxed.

Credit Counseling Services

As mentioned, a reputable Binghamton bankruptcy attorney like Laura Harris-Courage will offer advice and guidance to help you through a very difficult situation. Without legal assistance, you could end up like millions of other people who believe that credit counseling services are a better solution. Now, there are times when this type of service is the right choice. For instance, if your level of income is such that you would be forced into paying your creditors completely off, even if bankruptcy is filed, credit counseling services might be the right path to take.

The problem is that the majority of income earned by credit counseling companies comes directly from credit card companies, which were initially responsible for creating these services to gain leverage in collecting monies owed. For this reason, many credit counseling services are viewed as being nothing more than collection agencies by the IRS.

As to the type of companies that credit counseling services can work with, there are limitations. This is why most deal solely with credit card companies. Keep in mind that once you secure the services of a credit counseling company, your creditors will be notified and advised to decline any further credit to you. Sure, these companies can often get interest rates reduced, but for principal balances, nothing is lowered.

Seeking Legal Advice

To protect yourself from becoming a victim of debt reduction companies and credit counseling services, we strongly recommend that you take advantage of a free phone consultation. The best Binghamton bankruptcy attorney will gladly offer assistance, regardless if this entails filing for bankruptcy or getting resolution for your financial situation in a different way. By contacting Binghamton bankruptcy attorney, Laura Harris-Courage, at 855-269-2889 to schedule a sit-down meeting, a plan can be devised to help you achieve financial freedom.

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