Why Bankruptcy Is A Better Choice Than Debt Settlement? A Case Study!

02 Oct Why Bankruptcy Is A Better Choice Than Debt Settlement? A Case Study!

You can’t turn on a radio or watch TV without hearing or seeing commercials for debt settlement companies that suggest that they are a better choice than bankruptcy. Many, including myself, believe that these companies are scams.

There have been several articles on the Bankrptcy Law Network sitethat discuss the problems with debt collection companies, but the following experience of a client highlights the many problems.

I met with a client today that had signed a contract with a debt settlement company.

At the time I met with him he had paidseveral thousand dollarsto the company with the understanding that they would negotiate with his creditors and settle the claims.

In June of this year the client was served with a lawsuit by one of his creditors and contacted the settlement company. The client was told that the creditor would be contacted and the debt would be resolved.

Three weeks ago the client receives his paycheck and it is much less than he usually received. After looking at the withholding on the check he realized that his wages were being garnished.

A call to the courthouse confirmed that the creditor had obtained a judgment against the client and that his wages were being garnished to satisfy the judgment.

The client has been unable to get the debt settlement company to call him back.

How would the result been different had a bankruptcy been filed:

1) The money paid by the client was much more than he would have paid to file a bankruptcy;

2) The bankruptcy would have stayed all collection proceedings against the client, so the creditor could not have sued the client for the debt;

3) Even if a lawsuit had been filed, the lawsuit would have been stopped by the bankruptcy.

Fortunately, we will be able to stop the garnishment now and stop any further efforts by creditors to get money from this client.

Before signing up with a debt settlement company, consult an experienced attorney and review all of your options.

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I've been a consumer bankruptcy lawyer for nearly 25 years. Since that time I have helped many people resolve their financial problems. I have been practicing law since 1986 and I am licensed to practice in all state and federal courts in the State of Louisiana. Because I am a sole practitioner, you know that your debt matters are being handled by me personally. In addition to my work with consumers, I am also frequently asked to speak at local seminars on bankruptcy law. I am member of the following organizations: • Louisiana Bar Association • National Association of Consumer Bankruptcy Attorneys • Bankruptcy Law Network My office is located at: 3920 General DeGaulle Drive, New Orleans, LA 70114 Telephone: (504) 368-4101

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