When money is hard to come by, particularly during a time of economic downturn, many people are finding themselves having difficulty making ends meet and they fall deep into debt. The very thought of going into debt and watching the bills pile up adds stress to your life and the constant calls from creditors and bill collectors can easily make you feel overwhelmed. These thoughts and feelings often make people very vulnerable and they become an easy target for credit counseling, debt management, or debt relief programs that are actually in the business of making money off of you and your creditors.
Many debt relief programs are really scams run by con artists who disguise themselves as credit counselors or other non-profit organizations in order to gain consumers’ trust. Given the troubling economic climate and the large amount of confusing information out there, it is crucial that people educate themselves and arm themselves with the truth about debt relief and credit counseling companies.
Here are some eye-opening facts that debt relief programs and credit counseling companies do not want you to know:
The biggest source of income for debt counseling companies comes from credit card companies themselves (creditors kick back a percentage of each monthly payment to the debt counselor).
Next to minimum payments on high interest credit card debt, credit counseling is how credit card companies make most of their profit.
Your credit rating will drop immensely by using a debt counselor which, in turn, will involve you paying much more in fees and interest rates while you are enrolled in your debt management plan.
Bankruptcy is an effective alternative to debt management programs and credit counseling. Bankruptcy helps people who do not have the means to pay their bills get a fresh start. This fresh start “is accomplished through the bankruptcy discharge, which releases debtors from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts.”
Like credit counseling and debt management programs, there is an immense amount of bad information out there about bankruptcy. Here are just a few common misconceptions about filing for bankruptcy:
MYTH: You will never get credit again after filing for bankruptcy.
In fact, by discharging your debts in bankruptcy you become more attractive to lenders because you have little or no debt and “your income is protected because your old creditors are discharged, forever.”
MYTH: Filing for bankruptcy means never owning a home again.
The Federal Housing Authority has stated that after two years have elapsed since the discharge date of a Chapter 7 bankruptcy and re-established good credit is demonstrated, a borrower can obtain a FHA mortgage.
MYTH: Only bad people and deadbeats file for bankruptcy.
Bankruptcy is a solution to help good people get through tough times. Many people who file for bankruptcy have to file because they have lost their job, gone through a divorce, or experienced a medical illness.
Bankruptcy is a solution to help good people get through tough times. Many people who file for bankruptcy have to file because they have lost their job, gone through a divorce,
or experienced a medical illness.
At the Law Office of Joseph M. Annutto PLLC, our bankruptcy attorneys have several years of experience helping people get out of debt by filing for bankruptcy. We offer a FREE initial consultation and will explain the bankruptcy process and help you decide whether bankruptcy is the right option for you.
Law Office of Joseph M Annutto, PLLC
369 Main St
Nashua, NH 03060
Phone: +1 (603) 881-9161
Fax: +1 (603) 821-5185
Or use our contact form.
We can be reached during the following hours:
Monday through Friday
8:00 am to 5:30 pm
And at other times by appointment
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