Legal Question in Bankruptcy in New York

Re: debt settlement program

Consumer debtors should be very skeptical about so called "debt settlement" or "debt consolidation" programs [not to be confused with "credit counseling" -- which is something completely different -- and generally a good thing].

The website of the Federal Trade Commission (at www.ftc.gov) covers the topic of debtsettlement/debt consolidation pretty well and basically concludes that debt settlement companies don't provide you with anything you couldn't do on your own. The debt settlement industry is driven by commercial advertising and hard sell tactics.

What many people don't understand about it is that it is entirely voluntary for your creditors. If they are happy with their collectors and collection attorneys and would rather see if they can recover more through collection efforts, including through the court system and judgment enforcement, there is absolutely nothing stopping them from doing so (unlike bankruptcy where such efforts are stayed).

The debt settlement companies typically advise their clients to stop paying all of their bills and make payments to the debt settlement company. Many of our bankruptcy clients tried debt settlement first and ended up with liens on bank accounts and other aggravation they would never have had if they had filed bankruptcy in the first place.

Whether debt settlement or bankruptcy is right for a particular debtor will depend upon the specifics of his/her situation, such as how many creditors he/she has, aggregate debt, credit report profile (that the creditors see when they make collection decisions), etc.

The decision to file bankruptcy requires careful consideration. You should consult with a bankruptcy attorney to learn your options. The foregoing is intended as general information of interest to readers of this website and is not intended as legal advice for your situation. You should consult with an attorney to learn your rights and remedies relevant to your situation.

Also, please feel free to visit the Frequently Asked Questions (FAQs) about personal bankruptcy and collection topics on our website at

www.starrandstarr.com/faqs.htm

Best regards,

Re: debt settlement program

Your question is impossible to answer without knowing your particular case. Contact an attorney who is geographically close to you (I'm in Clifton Park & Schenectady) with whom you feel comfortable to discuss your situation. If you need a referral to someone, you can contact your county's bar association and/or the NYS Bar Association (www.nysba.org).

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.