RISKY ALTERNATIVES

As you consider some of the other programs out there, such as settlement/negotiation, consolidation, or bankruptcy?…  It is important to understand why those programs may leave you in a worse position.

DEBT SETTLEMENT RISKS:

Debt Settlement will cost you 15% of your total debt and plunge you into a three year payment commitment and if you don’t complete it, you’ll be in worse debt than you ever could have imagined. They will hold your money for a year, but you will continue paying the settlement company and answering collection calls and lawsuits. And when the creditors and their collection buddies are screaming, calling you every day at work and home, you’d better hope they accept the settlement company’s offer to pay less than what they say you owe. In case they haven’t told you this, the trend now for many creditors is to refuse ALL settlement offers! And if they sue you before then, forget about it!

WARNING!: The Amount of money you end up “saving” through a settlement is considered “taxable income” by the IRS. So if you have a $10,000 debt settled for $3000 the $7,000 you “saved” is considered income and you must pay taxes to IRS for it at the end of the year when your creditor sends you a 1099-C (Cancellation of Debt) form.

Many creditors, once they know a client is working with a debt-settlement company, will escalate the account. That means sending it to a collection agency sooner or even suing you. And when a creditor takes legal action, the debt-settlement companies drop the account: They don’t have the right to give legal advice or represent you in court, and believe it or not, nor do their attorneys.

Settlement is illegal in at least 12 states!

Article from SmartMoney.com:

[While the laws regulating debt-settlement companies vary greatly by state, it's worth noting that 12 states currently prohibit for-profit debt management. Since debt-settlement companies are for-profit entities, they're not allowed to practice there.

Those states are Arizona, Georgia, Hawaii, Louisiana, Maine, Mississippi, New Jersey, New Mexico, New York, North Dakota, West Virginia and Wyoming. If you live in one of those states, remember: It is illegal for for-profit debt-settlement companies to contact you and work with you, even if they're based in another state. "Many companies do it anyway," Linfield says. "And that's a big red flag." ]

DEBT CONSOLIDATION RISKS:

In the history of the human race, no one has ever been successful at going further into debt to get out of debt. Although, if you work for the U.S. Congress you might not understand this quite yet. It is a mathematical certainty that the same habits that got you into debt will NOT get you out of debt, period! This is just another way to steal from you, and I don’t care what they say about your “new” interest rate. Any accountant can verify that you will be in more debt regardless, and did you know that 98% of those who enroll in consolidation are in more debt within 2 years? I’ll bet you your total debt that this is verifiable, check it out.

BANKRUPTCY RISKS:

This is the same as being sued by all of your creditors within 30 days and then having an attorney tell you what will be done with your property and income. You will have no power to negotiate and you will be treated like a child. I’ll bet not one attorney will tell you that only those who have nothing to lose will qualify for a Chapter 7, meaning that they should not have filed bankruptcy in the first place.

Expect to get into a Chapter 13 payment plan; even if your attorney files under Chapter 7, eventually it will be removed into a Chapter 13! If you don’t believe me, check the court records to see how many petitions were removed by an order of the court.

A common mistake people may make is to file for bankruptcy to save their home from foreclosure. The problem here is that in most cases the bank will request a removal from the bankruptcy proceedings, courts will usually grant, and the bank will continue with the foreclosure. Contact us if you need help with foreclosure.

Oh yea, and the two bankruptcy marks will remain on your personal credit for 10 years.