Q. I have too much debt! What do I do?
A. There are many options available to consumers with unwieldy debt.
Remember, however, that not all solutions are created equal. It is best
to speak with an experienced professional to determine what your best
options are in confronting your debt. Sometimes bankruptcy is the only
way to get out from beneath the load. More often, however, there are
options, like debt settlement or credit counseling that may fit your
needs better and may have a less negative impact on your credit.
Q. What's going to happen to my credit?
A. Most debt relief options will have a negative impact on your credit
score. Bankruptcy will have the longest and most significant impact.
Credit Counseling, on the other hand, may leave your credit in much
better shape. Since debt settlement is usually recommended to those who
are already delinquent on debt payments, this will have a similarly
negative impact on your credit. Every individual's situation is
different. Erasing debt through bankruptcy or asking a creditor to
forgive significant portions of your debt will have negative
consequences on your credit.
It is very important to make a fully informed decision regarding debt
relief. Please talk to us.
Q. What about my taxes?
A. There are often tax implications when pursuing debt settlement. The
federal government considers the portion of debt that is forgiven in
this process to be "cancellation of debt" income and you will be liable
for that income. Very often, however, the balance between paying the
full amount of debt vs. paying taxes on this sort of "income" still
favors debt settlement. Every individual's situation is different,
however.
Generally speaking, debt discharged in bankruptcy does not have tax
implications for you, but it is best to speak to an experienced
professional to understand your options fully.
Q. What's credit counseling?
A. Credit counseling differs from debt settlement primarily in that you
end up paying the full amount of your debt over an extended period of
time. Many creditors are willing to accept this solution, including much
reduced interest rates, because it allows them to recover the majority
of their debt. For those individuals who are current on their debt, but
worry that making minimum payments will never ease their debt burden,
credit counseling may be the right option. Of all the debt relief
options, credit counseling is least likely to impact your credit score
negatively.
Q. Can I stop this harassment? I'm getting calls every day!
A. While creditors have the right to contact you to attempt collection
of debt, many collectors violate YOUR rights when they contact you. The
Fair Debt Collection Practices Act spells out your statutory rights in
these situations. Important to note is that the primary creditor (the
person or company from whom you have directly borrowed) has much greater
latitude in its attempts to collect on debt. The FDCPA applies mainly to
collections agencies that have bought debt.
The best practice is to make a detailed record of all communication
between you and your creditors. Demand that callers identify themselves.
Do not tolerate harassment and consult with experienced professionals
who can inform you of your rights.
For a detailed FAQ about collection calls, check out the FDCPA FAQ for
debt collection: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm
Q. Can my wages be garnished? Can they take my property?
A. In most states, if you are sued on a debt, you may be subject to
garnishment of wages or garnishment of money assets. The amount of wage
garnishment varies by state and is federally capped at 25% of your
disposable earnings. Sometimes garnishment is inevitable. Working with
experienced professionals can reduce this risk, however.
If a court issues judgment in favour of your creditor, the creditor will
try to collect that judgment in any possible way. It is possible that
the creditor will attach a lien to your real property, such as a house.
Given the enormous complexity and wildly different laws from state to
state, it is best to consult with an attorney to find out what options
are available to you and what options are available to creditors trying
to impose a judgment against you.
Q. What if I do nothing and just hope the problem goes away?
A. Doing nothing is always an option. It is generally the worst option,
however. Creditors and Collectors are not likely to forget debt and are
not likely to stop calling if you do not take action. Your credit score
will plummet, you will be harassed and eventually you may be sued.
Instead of waiting for a potential lien on your property or garnishment
of wages, we recommend exploring better options.
Q. I heard about debt settlement companies stealing money and
disappearing. Why should I trust you?
A. Trusting your debt relief to an organization is a difficult decision.
Often, you give up a great deal of control and money and entrust it to
someone you have never met. While there are many reputable debt
settlement and relief organizations, the option of trusting a law firm
with experienced attorneys is a much better one. In addition to being
bound by state and federal statutes, attorneys are bound by the code of
ethics of their respective state bar associations. This affords you an
additional level of protection against both outright theft and
negligence. Do your research and let us earn your trust.
Q. Am I going to get sued?
A. The possibility of a lawsuit is ever-present in our society. This is
particualrly true when dealing with creditors who want their money. In
the vast majority of cases, creditors do not sue. However, anyone
stating that there is no chance of a lawsuit is lying to you.
As you might assume, working with experienced professionals like those
at Consumer Debt Legal Center can reduce the likelihood of your being
sued. Additionally, we are committed to helping you understand the
litigation process so that you are prepared to deal with it effectively.
There are no guarantees in this business, but it is our practice to help
you reduce your debt safely without going to trial.
Q. What about bankruptcy?
A. Bankruptcy is usually considered a last resort. When your debt is so
unmanageable, your income is insufficient or perhaps you have suffered a
significant personal crisis (e.g. divorce, medical emergencies, etc.),
you can petition a court to declare you "legally insolvent" and unable
to pay your debts. Obviously, there are significant negative
implications for filing bankruptcy. When it is appropriate, however, the
benefits of filing for bankruptcy can outweigh these significant
negative impacts.
For most consumers considering bankruptcy, a Chapter 7 or Chapter 13
bankruptcy is likely to be appropriate. Each bankruptcy is an individual
matter, tailored to the consumer's personal situation, but there are
general rules for both. Chapter 7 bankruptcies require a consumer to
attempt to satisfy debts from his assets with a court-appointed Trustee
as an intermediary. In Chapter 13, you are required to pay off most
debt, but the terms of the repayment are relaxed to suit your personal
circumstances.
Given the complexity and the serious ramifications of filing for
bankruptcy, there is no substitute for consulting with an experienced
professional and discussing your options. Reducing the negative impact
and creating positive results is our job. Let us help you.
Q. Will working with you improve my credit score?
A. Unfortunately, we cannot guarantee that your credit will immediately
(or ever) become restored. We can, however, guarantee to keep you fully
informed as to how you will be affected by debt relief options. If you
are enrolled in our debt settlement programs, we will inform creditors
of each settlement, which may in turn have a positive impact on your
credit score. Engaging in one of our credit counseling programs may have
the least impact on your credit score. Despite any effort on our part,
however, a bankruptcy will have a lengthy negative impact on your
credit.
Talk to us. Let us help you understand how your credit will be affected
and what steps, if any, you can take to improve it.
Q. Okay, I signed up for X. What if I want to drop out?
A. That's okay. While we cannot guarantee results, we understand that
situations change. We offer refund policies on most of our programs.
Please note, however, that most programs are designed for lengthy
commitments (generally 1-2 years) and require a lot of discipline and
diligence to complete. If it is a matter of a payment or two, call us to
arrange something rather than letting all that work go to waste.
The best practice for any debt relief solution is to maintain contact
with CDLC and our affiliates. We want to help you.
Q. I'm confused about X. What should I do?
A. Call us! 1-888-657-4588 or fill out the form below. Once we understand your situation, we can better suggest
what method of debt relief is appropriate for you. Let us help you take
control of your life.
Complete this form and a debt relief consultant will contact you
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