Debt Consolidation Lawyer Has Little Love for Debt Settlement

June 9, 2013 3:02 pm Published by

They all know it – my clients, my colleagues, readers of these Bankruptcy in Indiana articles – I am no lover of debt settlement companies. Last week I shared the news that criminal charges are being brought again two East Coast debt settlement companies.

We’ve all heard the saying “There’s strength in numbers.”  Well, as a debt consolidation lawyer who’s been offering Indiana bankruptcy services for more than 26 years, I would venture to say “There’s weakness in numbers” when it comes to debt settlement companies. I just finished sharing some statistics about this with the Indianapolis, Anderson, Richmond, Bloomington, and Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices:

  • Fewer than one in ten consumers who work with debt settlement companies actually ends up debt-free in the promised period of time.
     
  • More than 500,000 consumers are currently enrolled in debt settlement programs.
     
  • Approximately $15 BILLION of debt is “enrolled” in debt settlement programs.

“We believe that debt settlement schemes are the number one problem facing American’s most deeply indebted consumers today,” said North Carolina bankruptcy attorney Ed Boltz, incoming president of the National Association of Consumer Bankruptcy Attorneys.

As a debt consolidation lawyer offering bankruptcy help in Indiana, I used to think payday lenders were the biggest problem for consumers who would arrive at our offices desperate for payday loan debt help. The problem with the payday loans was the extraordinarily high interest rates they charged. The laws have since been changed to rein in some of the more abusive payday lending practices.

With debt settlement companies, the main issue is a different one, as Ellen Harnick senior policy counsel for the Center for Responsible Lending explains:
“Debt settlement companies require clients to actually default on their debts.”  Only then will the debt settlement company negotiate with creditors on their behalf.  That, of course, adds late fees and penalty interest charges to the debt and frequently results, Harnick points out, in clients being sued by their creditors.

You may be sure this Indiana lawyer for bankruptcy has little love for debt settlement companies!
 

FacebookTwitterGoogle+Share

Categorised in:

This post was written by Mark Zuckerberg

Comments are closed here.