Submitted by Jen Jones on Thu, 06/11/2009 - 7:32pm
In this age of near double digit job loss, devious credit card practices, multiple industry collapses, and out of control government spending that promises a future of oppressive taxation, it's a wonder anyone is still able to keep his head above water. More and more people are now realizing that they are at the helms of rapidly sinking ships. What's astonishing is that amidst all the dour economic predictions, people are still finding the will and strength to try to rise above the bad luck, poor decisions, or whatever put them in dire financial straits and get back on solid footing again.
In looking for solutions, many people turn to individuals and businesses that have recently arrived on the scene to "help- them out of their economic morass, and guide them to safety. Establishments with innocuous sounding names, including words such as 'solution', 'trust', and 'hope', have opened shop promising to help lift the burdens of stressed out, debt-weary consumers. Unfortunately, too many of these organizations are nothing but opportunists, charging high fees and providing shoddy service.
'Credit Counselors', which purport to act as a neutral third party to negotiate payment plans with creditors, are often related to or financially supported by the credit card companies, so their interests are completely opposed to those of their consumer clients. Many charge high upfront fees, usually a percentage of the total debt, and often always discourage debtors from filing bankruptcy.
'Debt Consolidators' offer to replace a multitude of monthly bill payments with a single affordable payment . The consolidator loans the consumer an amount sufficient to cover the old debts or negotiates lower terms with the creditors. This is a marketing ploy designed to convince people that they can get out of debt by borrowing more money. Some agencies may keep the entire first month of credit payments for themselves, plunging the consumer further into debt and usually causing their accounts to get slammed with late fees and penalty interest rates. The most unscrupulous of the bunch keep all of the negotiated 'payment plan' payments and never send anything at all to the actual creditor.
'Debt Collectors' often use a bait and switch scheme to get access to the debtor's bank account information. They offer to 'settle' a debt for a lower amount, and pressure the debtor into making a spur-of the moment decision by asserting that the offer is only good if the debtor agrees to pay the lower amount 'right now'. Once the debtor concedes, and gives the bank account information, the debt collector withdraws more money than they offered to settle for. Beyond this scheme, debt collectors will pretty much tell a person anything in order to collect.
Can't imagine anyone getting suckered into these kinds of ploys? Well, it's happening at an alarming rate, and consumer complaints about them have skyrocketed. We're not just talking about naive or careless spendthrifts here. There are a lot of hardworking, smart, capable people out there who are becoming victims as well. And if they do manage to avoid these pitfalls, deciding instead to accept the protection and relief that bankruptcy affords, they could still find themselves at a disadvantage.
You see, many of these smart, capable people decide to file for bankruptcy without an attorney, thinking that they can avoid paying legal fees. They mistakenly believe that the bankruptcy trustee is there to protect them from the creditors when in fact the bankruptcy trustee's main responsibility is to collect money from debtor's assets and use them to pay creditors as required by the bankruptcy laws. It is the job of the bankruptcy trustee to make sure that the creditors get their fair share of the debtor's money. It is not the job of the bankruptcy trustee to protect the debtor. Bankruptcy judges, for the most part, conscientiously try to balance fairly the interests of both the debtor and creditor. But the bankruptcy judge, is not specifically charged with looking out for the debtor's interests.
So, who is looking out for you? All of the characters you'll encounter in the bankruptcy system, as well as the new 'debt relief' industry, may act politely and respectfully toward you and each other, but don't be fooled into thinking they are really on your side. During such a stressful and vulnerable time as this, you need and deserve an advocate whose main concern is your best interest. That advocate is your bankruptcy attorney. Whether you've decided to undertake bankruptcy to clear the decks of debt and start over with a clean slate, or whether you're going to try to ride the storm out alone, a bankruptcy attorney should be the one you trust to advise you and guide you now. Only a bankruptcy attorney is uniquely trained to help people suffering from financial problems. Only a bankruptcy attorney has experience maneuvering the complex bankruptcy system with the debtor's interests in mind. It IS the bankruptcy attorneys' JOB to look out for you.
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