Legal Question in Bankruptcy in Texas

Call us..no charge for consultation but we need facts to properly advise you.

I don't want to slip into a rant about "debt management" companies but will give you just a couple of points about them.

-- In DM, you get no guarantee of result, it's all dependent on whether the creditors feel like playing ball or feel like holding out for a better offer. In bankruptcy they are required to participate and they get what they get.

-- In DM, the total amount you pay back is tied to the amount you owe. In bankruptcy you only pay what you can afford (ch 13) or pay nothing at all (ch 7).

-- In DM, you usually pay more in fees, it's a flat amount up front (2-3k) plus a percentage of the savings (they settle for 40%, your contract authorizes 55%, they keep the 15% difference); in bankruptcy the total ch 13 fee cannot go above the "standard" number set by the court (3k in DFW, paid out over 3-5 years) and the up front amount is a fraction of the DM amount.

-- In DM, you will received 1099s on the forgiven debt which means you'll owe the IRS roughly 30% (depends on your tax bracket) more on top of what you thought you saved. In bankruptcy you don't owe any extra taxes.

-- The DM industry racked up so many "F" ratings with the Better Business Bureau that BBB has now stopped taking DM companies as members and has started publishing scam alerts about the DM industry. All bankruptcy attorneys are licensed by the state and many have A+ ratings with the BBB.

I hope these points help as you're researching all the available options.

Rustin Polk

Dallas Bankruptcy Attorney

www.214bankruptcy.com

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