Diamond Speaks His Mind on Bankruptcy and Related Topics

A NEW EVIL HAS EMERGED - DEBT RELIEF STOREFRONTS

Oh my God, today I spoke with a woman who was considering bankruptcy as a way to get out from under her credit card debt.  She like most people would rather pay off her debts than file for bankruptcy especially when you can wrap your arms around your debt total.  I applaud your ethics and values.  Sometimes, based on how much you owe in credit card debt it could take years and years and years to pay off especially due to mounting interest rates.  Some of these debt relief storefronts are no better in helping you than the exorbitant interest rates charged by the credit card companies.  Getting back to this woman I spoke to today, her debts today were approximately $6,000.  The company she was (at least I hope it's in the past now)  considering working with was going to charge her on top of her  monthly payment towards her credit card debt  - a service charge of $300 per month during the lifetime of the  payment schedule.  She was told that it would take approximately 24 months.  What is wrong with this picture?  A $6,000 debt without additional interest charges would cost this woman more than $13,000.  People do the math!!  I know how it feels to have bills you can't pay and to have creditors breathing down your neck.  I know how badly that can make you feel and so you think anyone that will work with you is a blessing.  NOT................  Read, read, read the fine print........... You're not buying a car ............. you're paying off debts.   DO THE MATH. 

If you choose to handle your credit card debt through a debt relief agency seek out a non- profit agency.  Or consider filing bankruptcy, Chapter 7 where you erase entirely your credit card debt as well as all unsecured debts if you qualify.

Not All Debt Relief Companies Are Created Equal

 

I want to make it clear that I have nothing against "Debt Relief Agencies".  Under the right circumstances they perform a service that avoids bankruptcy for many people.  Some of these companies are honest, charge reasonable fees and have a staff that is well trained.  A good example is the YWCA here in El Paso, Texas.  Over the past six months it appears that the number of companies that offer debt relief by making deals with your creditors has increased substantially.  You see their ads on TV, hear their ads on the radio and read their ads in the newspaper.  Unfortunately many of these companies charge large up-front fees and provide no meaningful service to their customers.  The bankruptcy judge has expressed deep concern over these companies and has said that there has been at least one indictment and conviction in San Antonio, Texas.  He has asked the bankruptcy bar (lawyers) and the Office of the United States Trustee to gather as much information as possible with the idea in mind of turning the information over to the Department of Justice for prosecution.  However, as with most things in life, you must protect yourself.  Before hiring a debt relief company ask for references and check them out carefully.  Beware of any company that wants large up-front fees (read the fine print) before they will do anything on your behalf.  Most importantly, remember if it sounds too good to be true - it usual is.