Many people consider going to a debt consolidation agency before filing for bankruptcy.
These debt consolidation companies advertise that they can lower your monthly payments and improve your credit, but in our experience, the truth is usually different.
Often times they will take your money and work to lower your payments, but won’t have any success.
This is because they don’t have any legal power to make your creditors lower the payments.
What happens when you hire a debt consolidator?
Hiring an experienced Minnesota bankruptcy lawyer is always better than hiring a debt consolidator.
The way these debt consolidation agencies work is like this:
- They take monthly payments from you and try to negotiate with your creditors to pay less
- They give some of your money to the creditors, and they keep the rest
However, the problem is that:
- The creditors have no reason to agree to accept less money
In fact, since the creditors are only interested in money, they have no reason to accept these lower offers at all.
What can happen?
If just one creditor doesn’t agree to a lower payment, they can sue you to collect and the consolidation company can do nothing to help you.
There are even reports of debt consolidation companies taking peoples’ money and then disappearing without doing anything to help.
Hiring a lawyer is better than hiring a debt consolidator because unlike a debt consolidation company, a lawyer can use the law to force creditors to give you a better deal.
Why is filing for bankruptcy better?
Filing for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy is better because The Bankruptcy Code is a very powerful law that can destroy or lower debts, whether or not the creditor agrees.
A good bankruptcy lawyer also knows how to use the law to protect your property and money from things like garnishment and seizure.
Thus an attorney can help and protect you in many powerful ways that a debt consolidation company cannot.
WHAT TO DO NEXT
If you’re considering hiring a debt consolidation company, then why not not speak to us now at 612.824.4357 first, and see whether filing for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy in Minnesota could be right for you?
We’ll give you all the help and advice you need.
We’re looking forward to helping you.
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