Los Angeles Attorney Advises on Credit Card Debt Settlement
California lawyer urges caution in exploring debt refinancing alternatives
It is easy for consumers to incur too much credit card debt, but if and when you are in that position, you should think carefully before resorting to a credit card debt settlement company. In fact, it might actually cost you more money in the end. At the Law Offices of Michael Jay Berger, I advise debtors on their best options for reducing or eliminating credit card debt, including bankruptcy where appropriate.
What you might not know about credit card debt settlement companies
Credit card settlement companies offer to negotiate lower payments on your credit card bills. However, you must pay money to them for a substantial period of time, often 36 months or more. This money, minus the debt settlement company’s fees, is offered to the credit card company to settle your debt. You will probably need to stop payment on your credit cards and the debt settlement company might actually recommend that you do so to encourage the credit card companies to settle.
However, your creditors are under no obligation to agree to a lower amount or to wait for payment and may instead sue you or damage your credit rating. Furthermore, even if the credit card companies cooperate, you might not be able to afford the payments to the debt settlement company. If so, you may have to drop out of the program. And if you do save money, your savings are taxable as income.
Still another problem is that some debt settlement companies make promises they cannot or will not keep and may fail to advise you of the risks involved. The Federal Trade Commission recommends that you do not use any debt settlement company that:
- Charges any fees before it settles your debt
- Claims that it can take advantage of a “new government program” to settle your credit card debt
- Guarantees that it can eliminate or substantially reduce your debt
- Tells you to stop communicating with your creditors without explaining the risks of doing so
- Tells you it can stop all debt collection calls and lawsuits
If you do choose to use a debt settlement company, make sure it advises you — before you sign on — of how its process works, how long it takes, all of the risks involved, how its fees are computed and when they are collected.
When you use an attorney
There are several advantages to retaining an attorney who is a certified specialist in bankruptcy law to help you settle crushing credit card debt. A lawyer skilled in this area can:
- pursue legal remedies to stop collection calls and other tactics
- go over your options, including negotiating a settlement, and recommend the best course of action, which may be bankruptcy
- defend you in lawsuits and sue credit card companies or collection agencies who violate your rights.
Moreover, an attorney has an ethical obligation to represent your interests alone and not to be influenced by the prospect of enrichment from dealing with your creditors.
Let a knowledgeable California attorney protect you from credit card debt
I am a Certified Specialist in Bankruptcy and experienced in representing debtors in negotiations with credit card companies and debt collection agencies. Call the Law Offices of Michael Jay Berger at 310-271-6223 or contact us online to schedule a consultation at my Los Angeles office.