{"id":586,"date":"2012-06-04T20:29:23","date_gmt":"2012-06-04T20:29:23","guid":{"rendered":"http:\/\/www.westcoastbk.com\/blog\/?p=586"},"modified":"2012-09-12T06:16:28","modified_gmt":"2012-09-12T06:16:28","slug":"is-debt-consolidation-a-good-idea-does-debt-settlement-work","status":"publish","type":"post","link":"https:\/\/www.westcoastbk.com\/blog\/2012\/06\/is-debt-consolidation-a-good-idea-does-debt-settlement-work\/","title":{"rendered":"Is Debt Consolidation a Good Idea? Does Debt Settlement Work?"},"content":{"rendered":"

By Ryan C. Wood<\/a><\/p>\n

Well, no, usually not.\u00a0 Debt settlement is different than debt consolidation.\u00a0 Debt settlement is offering lump sum cash payments to settle the debt and have the credit card company forgive some of the debt owed.\u00a0 You absolutely do not need to pay someone to do this.\u00a0 The problem most people run into is they do not have the cash to settle all of their debts.<\/p>\n

Let me tell you about debt consolidation.\u00a0 First of all, you do not want to do business over the phone with a company in Florida or Southern California if you live in the Bay Area or another state.\u00a0 It is best to be able to go to a business\u2019 offices and look the person in the eye you will be giving your hard earned money to.\u00a0 Especially when considering a debt consolidation company or bankruptcy for that matter.\u00a0 I think that goes for everything these days unfortunately, unless it is a large corporation like Amazon.com.\u00a0\u00a0 I cannot tell you have many clients we have had to fix their bankruptcy cases because they chose to use some attorney that is hundreds of miles away and that they have never met.\u00a0 If something goes wrong what jurisdiction would you have to sue the debt consolidation company in?\u00a0 I can tell you that the agreement you sign will probably have a jurisdiction listed that is where the company you retained is located and not where you live.\u00a0 That is a huge problem if you have to sue them in Florida or some other part of California where you do not live.\u00a0 It makes the cost of litigation sky rocket and makes it not worth suing to begin with most of the time.\u00a0 This is what these companies are counting on too.\u00a0 If you pay them $1,000 – $4,000 or make a monthly payment to them at around $100 a month, are you going to pay an attorney $200 plus an hour to sue them in the hope of getting your money back?\u00a0 Litigation is expensive and the cost of litigation is unfortunately a roadblock to getting justice.<\/p>\n

Second, debt consolidation is the wild wild west.\u00a0 There is unfortunately little government oversight of these companies.\u00a0 If you are thinking about calling a debt consolidation company please Google their name before calling.\u00a0 Google is very good at what they do and will find all the information you need about the company.\u00a0 Also Google the companies name and the word complaints to see what pops up.\u00a0 Unfortunately anyone can post negative reviews on many different types of websites without a shred of truth to the complaint.\u00a0 It is a big problem, but at the same time, if there is complaint after complaint year after year you know something is not right with that company.\u00a0 You can also Google the companies phone number to see what comes up.\u00a0 Many times these debt consolidation companies change names over and over again to trap new unsuspecting people.\u00a0 In my opinion any company asking you for money to provide any type of debt consolidation is a crook.\u00a0 You can do it yourself for free and see what happens.\u00a0 When the mortgage crisis first hit many crooks started loan modification companies and charged thousands of people upfront fees for loan modifications without doing anything to obtain loan modifications for the clients.\u00a0 The percentage of successful loan modifications is so low that California passed a law that makes accepting upfront fees for loan modifications a criminal act.\u00a0 Loan modification companies in California may only accept a fee once a loan modification is signed and recorded.\u00a0 The same needs to happen under Federal Law for debt consolidation companies.\u00a0 They should only get paid if they actually do what they say they can do.\u00a0 Right now that is not the case.<\/p>\n

A debt consolidation company will say they can negotiate a better percentage rate of reduce the amount you owe to a credit card company.\u00a0 Ask them for proof in writing from the credit card company regarding any reduction in amount owed or percentage rate.\u00a0 Do not trust what they send you on their letterhead.\u00a0 Anyone can list your credit cards and reduce the amount owed and the percentage rate to show you how you can save money.\u00a0 Again, why can you not do that yourself?\u00a0 Believe me, you can.\u00a0 Bankruptcy lawyers<\/a> do not worry about these issues when filing bankruptcy cases for people in need.\u00a0 Everything bankruptcy attorneys do is pursuant to the Bankruptcy Code and by court order.<\/p>\n

Finally, if you do not pay your credit cards for long enough credit card companies will send you settlement offers for lump sum cash payments without paying anyone anything.\u00a0 The problem is that usually one of your credit card companies will sue you and that is when you should give a bankruptcy attorney<\/a> a call.\u00a0 Most people do not want their wages garnished or bank accounts levied on to satisfy a judgment.\u00a0 Others are more proactive and seek the advice of a bankruptcy lawyer well before a lawsuit is filed to stop the harassing phone calls and tie everything up in a nice neat bow and just move on with life.\u00a0 Everyone is different and there is no right or wrong way to approach your debts if you can no longer pay them each month.\u00a0 Just please, please, please thoroughly investigate a debt consolidation company before giving them any money.\u00a0 I hate it when a client comes in and has paid a debt consolidation firm thousands of dollars for nothing and I have to file bankruptcy for them to once and for all make it all go away.\u00a0 To add injury to insult, our fees for a no asset Chapter 7 bankruptcy case are usually far less than what a debt consolidation company charges.<\/p>\n","protected":false},"excerpt":{"rendered":"

Let me tell you about debt consolidation. First of all, you do not want to do business over the phone with a company in Florida or Southern California if you live in the Bay Area or another state. It is best to be able to go to a business\u2019 offices and look the person in the eye you will be giving your hard earned money to. Especially when considering a debt consolidation company or bankruptcy for that matter. I think that goes for everything these days unfortunately, unless it is a large corporation like Amazon.com. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[54],"tags":[],"_links":{"self":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/586"}],"collection":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/comments?post=586"}],"version-history":[{"count":7,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/586\/revisions"}],"predecessor-version":[{"id":692,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/posts\/586\/revisions\/692"}],"wp:attachment":[{"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/media?parent=586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/categories?post=586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.westcoastbk.com\/blog\/wp-json\/wp\/v2\/tags?post=586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}