1 – NO LEGAL ADVICE OR REPRESENTATION

A Debt Negotiation Company

is not a law firm, like Freedom Debt Relief for example. They are not bound by the same cannon of ethics to which attorneys must adhere. They do not have the legal expertise to give legal advice regarding other options, including the laws governing Bankruptcy or defenses to lawsuits. In fact, as they are not an attorney, it is against the law for them to give you legal advice of any type. Clearly their options are limited. Conversely, only an Attorney can advise you on debt repayments, Bankruptcy Law, defenses to collection lawsuits, judgments, harassment, wage liens, repossessions, foreclosures, and virtually all other options.

2 – LONG TERM MONTHLY PAYMENTS

When you enroll in a Debt Negotiation Company

program you are promising to make monthly payments to that company, often for three years or even longer. They try to negotiate a lower payment to your creditors, which you pay, month after month after month, until you pay all your negotiated debt in full. Under this program, you could remain in debt for years. “Debt Relief” by making payments, month after month, does not come cheaply nor quickly, and you have much less chance to get new credit during the years you are paying them. Conversely, most Chapter 7 Bankruptcies in Maryland make your dischargeable debts disappear within about three months, (called your Discharge in Bankruptcy) and you generally pay your unsecured creditors NOTHING ever again, once your Bankruptcy is filed.

Read More: Bankruptcy and Wage Garnishment

3 – CREDIT IMPACT

Being enrolled in a Debt Negotiation Company Program

could negatively impact your credit. Freedom Debt Relief admits to that. The problem is, not only do you still have to pay your creditors, but often they don’t even START to forward your payments to your creditors until 4 to 6 months after you hire the debt relief company and start making payments to them. (Freedom Debt Relief admits to that, also). Conversely, in a Chapter 7 Bankruptcy for example, your credit score could increase upon filing Bankruptcy, and could increase even more when you get your final discharge apx. 3 months later. Why wait three years to buy a car when in a Debt Relief company payment plan, when you can apply for new car credit the day after you receive your Discharge in Bankruptcy. No guarantee, but I’d rather be able to apply in three months with a Bankruptcy rather than three years with a debt relief company 3-year repayment burden.

Read More: Debt Consolidation vs. Chapter 7 Bankruptcy

4 – TIME IS ON YOUR SIDE: NOT!

Because it could take up to half a year,

or even longer for debt relief companies to even start an agreement with your creditors as to how much you will pay them, one such company actually tries to convince the public that this is a good thing. You are obligated to make payments to them from day one, yet they hold on to your payments until the creditors agree to a repayment plan, if in fact they ever do. This traps you in a debt “limbo” if and when they actually begin to send your payments to the creditors. Six months or longer just to start, and often years of payment burdens with what is often NO credit worthiness whatsoever, is certainly not “on your side”. Conversely, a Chapter 7 Bankruptcy, for example, generally has you paying nothing at all to the same unsecured creditors, and being free of all your dischargeable debts in a few months, as opposed to up to three years in a burdensome debt relief obligation with the “debt-relief” companies. Note: On two occasions, we had clients who made payments to a Debt Relief Agency for several months. None of the payments had been paid over to any creditors. When they found out they could become debt free in a few months with Chapter 7, they contacted the Debt Relief Agency and asked for their money back since the company still had it all. Our clients were told that was their “fee,” but any additional funds the clients sent in would go to the creditors.

Read More: Bankruptcy Attorney in Southern Maryland Can Help You Get a Fresh Financial Start

5 – SETTLEMENT PAYMENT OBLIGATIONS

When a Debt Negotiation Company commits,

on your behalf, to try to “settle” your debts, that does not get you out of debt, it obligates you to new payment terms and you continue to pay, and pay, and pay, your creditors, in accordance with the monthly company settlement terms. And that’s only if the creditor agrees- it’s up to the creditor, not you. A Chapter 7 Bankruptcy does nothing of the kind. Why would someone who is overwhelmed with debt and little to no extra disposable income, want to make a new obligation to pay, for up to years, the debt they can’t afford to pay now, when they can fully discharge the same debts in approximately three months and be completely out of that debt obligation? The only rational answer to that question is because they don’t know the truth, or believe the misinformation which is put on the internet or other media by some creditors or debt relief companies, trying to mislead Americans into believing Bankruptcy is bad for them.

6 – CREDITOR HARASSMENT

If you use a Debt Negotiation Company,

such as Freedom Debt Relief, it could take 4 to 6 months, or even longer, for creditors to stop harassing you. And worse yet, they can sue you. In a Chapter 7 Bankruptcy, from the moment you file your bankruptcy the automatic stay applies, and no one can call you or harass you in regard to a debt.

7 – LEGAL RIGHTS

Sometimes people are misled,

or misinformed, into believing Bankruptcy is a bad option, or a “last resort”. Or that paying a Debt Relief company is better. The truth is, Congress made the Bankruptcy laws. They are codified in Title 11 of the United States Code, and your rights related to Bankruptcy are found in the United States Code. These laws and rights were made to help debtors in need to obtain a “fresh start”. Speaking to an experienced Bankruptcy Attorney will enable you to learn about all your rights in debt relief, not just the one option of debt relief which requires you to make payment on your bills. A Chapter 7 discharge may well be a much better option for you and your family, not to mention your wallet.