Those who are in a financial crisis are often grasping at any solution they think may help provide bankruptcy alternatives. In general, there are a number of options that may help the debtor delay or avoid bankruptcy altogether. However, there are just as many, if not more, that will promise debt relief but only make the problem worse. It is vital to avoid the scams and be able to identify the reliable agencies.
Legitimate Alternatives
Among the reliable alternatives are non-profit credit counseling services that can analyze a debtor’s financial situation and either help them devise their own plan to get out of debt trouble, or provide debt settlement services that are trustworthy. There are a number of telltale signs to warn debtors of agencies that may be questionable. In addition, There are sources to learn about legitimate alternatives to bankruptcy:
- The Better Business Bureau
- State Consumer protection agencies
- Reliable agencies should provide debt consolidation, payment services, counseling, and education. If they focus only on the first two elements, they may not be the full-service agency a debtor requires
- Make sure they provide a written agreement that can be reviewed in advance for payment schedules and service guarantees
- Confirm any payments made through an agency with the creditor immediately. If none were made, sever the relationship
Signs of Deception or Scams
While there are some agencies that provide helpful, reasonably-priced credit help, there are far more scams than at any time in recent history. It is important for debtors to research any potential agency thoroughly to determine if they are worthy of a working relationship. Some of the signs of a scam include:
- High up-front fees
- The absence of a written agreement with information about the debtor’s rights as well as the fees and services that will result from that relationship
- Efforts to prevent the debtor from contacting any of the credit bureaus themselves
- Any advice that appears to be deceptive or fraudulent in relation to the creditors or credit bureaus. These activities may result in illegal actions and prosecution
- Promises that appear to be “too good to be true.” Such promises usually are
- High monthly fees for consolidating and making payments to creditors
Getting Legal Help with Bankruptcy Alternatives
While there are some consumers who are in such bad financial shape that there is no viable alternative to bankruptcy, most people begin looking for solutions before they get to that point. There are a number of alternatives to bankruptcy, including credit counseling and debt management. However, it may take a legal expert to tell the difference between the legitimate agencies and the scams. Bankruptcy attorneys have both the financial know-how and the legal expertise to protect their clients and help them find the best solution to their financial problems.
