Three Ways Bankruptcy Is Better Than Credit Counseling

If you are having financial troubles you may be considering several options to get some relief. One popular choice is to consolidate debt, and to do this by going through a credit counseling agency. These agencies advertise the ability to negotiate lower repayment terms with your lenders, thus saving you big on interest and penalties. But beware, not all of these services can actually deliver on what they promise, and this can leave you in a worse position than when you began counseling services.

Three reasons bankruptcy is a better option for you than is credit counseling include:

•         Creditors are not required to participate in credit counseling and consolidation services, so even though you may have signed on with an agency for help, you may not receive the help that is promised when your lenders refuse the offers made by the agency.

•         Credit counseling and consolidation are not overseen by the Court, and thus there is no legal “bite” to your bark when you agree to allow a non-judicial party to come up with solutions to your debt problems.

•         Credit counseling does not include a legal prohibition against your creditors contacting you while negotiations are underway, but bankruptcy does have this provision included.

Bankruptcy is helpful because it puts an immediate stop to collection calls, lawsuits, and wage garnishments. This is because of a provision of the Bankruptcy Code  called the automatics stay, which is a legal mechanism that protects you from contact by creditors the minute you file a bankruptcy case. The purpose of the automatic stay is to give the debtor a chance to take a breath and get their bearings after filing. By having this reprieve, a distressed debtor is better prepared to rationally assess their financial situation and come up with solutions that work. We can help you get your finances in order; call us today to find out more.

If you have more questions about bankruptcy, contact us today at www.law-ri.com. We will help you come up with solutions that work for your family, and have multiple locations where we schedule appointments so you can make a choice that is convenient for you.