For far too many people, the idea of filing for bankruptcy carries with it a deep sense of shame and personal failing that will cause them to be willing to do just about anything to avoid filing bankruptcy. This includes falling for one of the many, many scams that feed on that sense of shame and desperation by offering them an all-too-good-to-be-true way to avoid bankruptcy or to lessen its impact.
The tragedy of this is not just the obvious – that people who are desperate, vulnerable and in dire financial straits are being taking advantage of – but that filing for bankruptcy is no reason for shame.
Bankruptcy was created as an honorable solution to an untenable financial situation. At its heart, the sole intent of bankruptcy is to give an honest debtor who, through bad luck, bad decisions, or misfortune, has accumulated far more debt than they can reasonably be expected to repay, a way to make things right with their creditors. Unfortunately, it has gained a negative stigma that scammers are far too eager to exploit for their own financial gain.
Getting to the brink of bankruptcy does not happen overnight, and neither does repairing the financial damage that a creditor accumulates on the way to bankruptcy. However, many less-than-scrupulous ‘credit repair’ or ‘credit counseling’ services would have debtors believe their problem can be solved immediately – if the debtor will just pay them first. Legitimate credit counseling services are generally available from a number of nonprofit organizations and should never request any upfront payment. The National Foundation for Credit Counseling (NFCC) maintains a nationwide list of reputable credit counseling organizations and is an excellent resource for question on many financial topics such as proper use of credit and bankruptcy.
Consumers considering bankruptcy should also be wary of anyone who promises to act as a middle-man and negotiate with creditors to reduce or eliminate debt, if the debtor will just pay them first so they can pay the creditors on their behalf. These services generally do not offer anything that the debtor could not accomplish on their own.
Debtors should also be wary of any companies or ‘mortgage consultants’ who offer quick fixes to avoid foreclosure on their homes. Often these companies will charge exorbitant upfront fees, or ask the debtor to transfer the deed to the home over to them, which can result in the debtor losing their home.
For each potential scam that is known, there are many, many others waiting to take advantage of unwary debtors. Generally, however, the oldest consumer advice is also the truest: if it sounds too good to be true, it probably is.
Keeping that in mind can save you from making a very, very costly mistake.
Bankruptcy can be a minefield of potential problems that can impact your financial future for years to come.
If you are considering bankruptcy, it is important that you consult with a dedicated, experienced legal team as soon as possible to help you make the right decisions to secure your financial future.
Contact us today and see what we can do to help you get started on that future.