Is it Better to Consolidate My Debt than to file bankruptcy?

Be Wary of Debt Consolidation Companies

Unfortunately, the debt consolidation industry is a popular target for scammers who seek to get money from those in a vulnerable situation without actually helping them to manage their debt.

There are a variety of debt consolidation options out there, but in reality leave you in the same or even worse financial situation. 

If you see these red flags, run in the other way!

If you’ve received unsolicited communications from a debt relief company, it may be a scam. 

Many charge upfront fees. You should never have to pay a debt consolidation company upfront. In fact, the federal government prohibits debt relief companies from charging upfront fees. 

Debt consolidators often pressure prospective “customers” to sign up for their services and share personal information. They may call or email you frequently. They might also try to play with your emotions, instilling fear and shame around your debt and claiming that you need the services they’re offering.

In some cases, a debt relief company may help you to settle your debt for less than you owe. But it’s illegal for a debt consolidation business to guarantee that they’ll get your debt forgiven or settled. If a company promises any specific results, you should be very wary.

In many of these so called consolidation plans, you end up with a lot of outstanding debt. 

Some of these companies instill fear in prospective customers by giving the myths about bankruptcy. Often, filing for bankruptcy protection under federal law is the best option for those struggling with unsecured debts. 

If you qualify for a simple Chapter 7, all unsecured debts will be eliminated. And your creditors can no longer harass or sue you.

More importantly, your case is finalized (or discharged) in approximately 3 months after filing. So you can immediately begin restoring your credit because the debts listed in your Chapter 7 bankruptcy are forgiven.

NJ Bankruptcy Attorney Lee Abt offers a free bankruptcy phone consultation to find out if bankruptcy is an option for you!

Call or email Lee today, to schedule your free bankruptcy phone consultation!