Should I seek bankruptcy help from a debt settlement company?

Bankruptcy Lawyers Arlington, TX

Should I seek bankruptcy help from a debt settlement company?Many bankruptcy lawyers Arlington, TX residents rely on know that clients who are struggling financially will sometimes consider working with debt settlement companies before they think about filing for bankruptcy. As top Arlington bankruptcy lawyers, the team at Brandy Austin Law Firm, PLLC also knows that quite often, working with one of these companies can leave a person owing even more debt.

Some studies show that debt can grow by as much as 20 percent more than before the person consulted with the settlement company, even if no settlement is ever reached with the creditor.

One of the tactics that debt settlement companies use to lure customers is to convince them that they will be able to significantly lower the customer’s debt by negotiating settlements with their creditors. They typically tell customers they will be able to pay off their debt in one lump sum for much less than what they owe.

Once a customer starts working with a settlement company, the company has the customer stop making all payments to the creditors. Instead of sending the payments to the creditor, the customer gives those funds to the settlement company. Those funds are then deposited in a special account which is used to pay the creditors — if and when the creditor and settlement company come to a negotiated settlement amount. The typical fee the settlement company charges is a percentage of the amount the customer owes the creditor.

It is generally not a good idea to simply stop paying a creditor, even when working with a debt settlement company. When a person stops making debt payments, their account then goes into default. When a person follows the instructions of a debt settlement company, their loan is now in a default status, which means they could accrue late fees and additional interest, depending on the terms of the contract. As bankruptcy lawyers Arlington, TX residents depend on may explain, by being in default, the customer would be at risk of a lawsuit if the creditor decides to sue the customer.

Another factor that bankruptcy lawyers Arlington, TX consumers rely on are aware of is that some creditors will not even consider negotiating with debt settlement companies. In fact, it is quite common for a creditor to become even more aggressive in their collection efforts once they find out a customer has hired a debt settlement company. Creditors that will negotiate may have standard guidelines regarding how much of the debt they are willing to forgive. They might not deviate from those guidelines, regardless of whether they are negotiating with the settlement company or the customer directly.

Brandy Austin Law Firm, PLLC: Bankruptcy Lawyers Arlington, TX Residents Trust 

If you are struggling with financial difficulties, bankruptcy may be the right option for you. The seasoned attorneys at the Brandy Austin Law Firm, PLLC are happy to discuss your case in detail during a complimentary case evaluation. To schedule an appointment with some of the skilled bankruptcy lawyers Arlington, TX has to offer, contact us today at 817-841-9906 or fill out a contact form from our website.