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Is Bankruptcy My Only Option?
Some people in financial trouble don’t need to file bankruptcy. Sometimes doing nothing will work. For elderly people with nothing but social security, simply telling creditors to call your lawyer may be all you need to do. (If I can work out a plan to fix your debt situation without a lawyer, there’s no charge. But I do make you listen to my favorite lawyer joke.)
Before I go into some of your options I want to share a story with you. Sometimes people wonder if working with debt negotiators might be a good choice. Of course, I’m a bankruptcy attorney so I consider bankruptcy a great option, but sometimes I run across people who’ve worked with debt negotiators. I wrote a post in my Virginia Bankruptcy Blog about Bankruptcy Scams. Here’s a snippet;
I’ve talked to three people in the last ten days who sent ten thousand dollars or more to “debt negotiators.” They stopped when the sheriff brought court papers. At that point, each one realized they had been scammed. And they realized it was time to talk to a bankruptcy attorney.
Yesterday, I met Linda–not her real name. This is her story.
When she signed up with this debt negotiator, she had $98,000 in credit card debts. They were all current. She had stayed current by living on the credit cards all month, and then her entire paycheck went to make the minimum payments. She knew this couldn’t go on.
Ten months later, she got court papers for her$20,000 Bank of American credit card. She had sent $11,119 over the ten months to the debt negotiator, and they had settled two credit cards for her. One for $629 and one for $2190. So, she had paid $8300 in legal fees, to get rid of $2819 in debts. Not a good deal.
(You can read the rest of the story at my blog – it will open in a new tab or window)
You Need To Be Careful
If you want to try to work out lower payments with your creditors, I used to recommend Consumer Crediting Counseling Service at 1-800-747-4222. They used to have four or five offices around Northern Virginia where you could meet somebody in person and go over your choices.
Now, they have been taken over by Money Management International at the same phone number, but now over the phone and on the internet. They have two Virginia locations: one location in Annandale and one in Roanoke.
I met a representative from Clear Point, when we did a little panel for the Northern Virginia Better Business Bureau. She seemed very nice. Their number is 877-422-9040.
The credit card companies really sold Congress on how these counseling services were better than bankruptcy. After the new law passed, the best ones closed down. I guess I shouldn’t be surprised at that, but I am. If your income is too high to get approved for anything but I very high payment Chapter 13, Money Management is probably better.
Northern Virginia Bankruptcy Attorney
I see one or two people every few months who should not set foot anywhere the bankruptcy court. The reasons for that are not things I want to put in writing, but if that applies to you, I’ll tell you so.
For those people, we can sometimes–sometimes–work out a plan to outrun their creditors. That’s a bumpy road, it may be your best choice.
For most people, bankruptcy works.