On Georgia Debt Law, you get serious information for serious situations. As a bankruptcy blog, we focus on the benefits of bankruptcy over other options. And credit counseling is one of those options. According to legal resource NOLO, credit counseling is an option on the table.
However, negotiating on debts yourself, or in many situations filing bankruptcy, protects your rights even more. This guide will focus on the downfalls of credit counseling when compared to bankruptcy.
What’s in a Lie?
Credit counseling agency are suspect for a variety of reasons. One major problem is when an agency lies to you about fees and services – in person, over the phone, via mail. If you get an honest, non-profit, accredited institution, that’s good. However, many agencies will pretend to be all these things and in fact not be a non-profit, accredited company. They might also lie to you on what fees you pay, make impossible promises, and not lower your payment rates at all. They might say they do, but they don’t.
On the other side, some bankruptcy lawyers can lie – about fees, about how bankruptcy can help you, about debts you can discharge, even about how much time they spend to help. There are many honest Georgia bankruptcy lawyers who are fair on their rates, who can help you discharge the most debt, who can consult with you on how to protect property such as your home and car, and can give you a fresh start.
Crazy Fees
Some credit counseling agencies need a reality check. If you are going through a major financial crisis, the last thing you need is another debt. Yet many credit counseling agencies will charge high fees for services you might be able to do yourself. According to NOLO, some credit counseling agencies will even take money to pay creditors for themselves. You send in $1,000, they take half and call it a fee (you can call it a hidden fee).
Once again, bankruptcy lawyers can charge unreasonable fees too. However, a professional Georgia bankruptcy lawyer will understand you are not filing bankruptcy because you have an extra $10,000 to pay a lawyer. Therefore, most experienced Georgia lawyers will charge from $1,000 to $2,500 for a bankruptcy. And you discharge the debt.
Promises, Promises
If you’ve ever been promised a big raise, only to find out your employer is cutting back, it can feel like a stab in the back. Some credit counseling agencies will make promises to people looking for hope, only to point out the fine print of their deal. “We can lower your interest rates and reduce the charges,” might be the statement. If you file Chapter 7 bankruptcy, you pay no interest rates; you pay little if anything. With Chapter 13 bankruptcy, you pay in manageable installments with no interest rates. And all collections against you stop for at least a few months.
Who can help?
This blog guide may seem biased, but if you’re going to negotiate with creditors, if you feel bankruptcy is not right for you, remember: credit counseling agencies do no negotiating you cannot do yourself. Call your creditors and start making offers. Now, if you have some big debts or pending repossessions, a Chapter 7 or Chapter 13 bankruptcy may be your best option.
