Over on the bankruptcy board at Lawyers.com, where I contribute, an Idaho consumer posted a poignant story of engaging a debt settlement company to “get them out of debt”. Using the “services” of this company, the poster now has six judgments of record and two garnishments in process. The debt settlement company, however, has its full fee.

Such stories, and there are lots of them, are emblematic of the profit that debt settlement firms and credit management outfits make on the consumer’s fear of bankruptcy. Most folks will do anything to avoid bankruptcy, either out of ignorance of how bankruptcy works or a moral preference for paying their debts.

Bankruptcy isn’t for everyone, but it would improve the lives of a great many more working families than now avail themselves of a fresh start. Everyone considering paying money to an organization promising to get them out of debt ought to see a bankruptcy lawyer before parting with a dime. Chapter 13 as a debt management alternative. With a handle on the alternatives, there would be fewer of these sad stories.

Cathy Moran
Bankruptcy in Brief

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