In 2005, Congress made sweeping changes to the US Bankruptcy Code, changes that were long overdue, according to the proponents of this action. Up until that time, no significant changes had been made to the Code for nearly 25 years. American life had changed and the abundance of credit cards had exploded. And, unfortunately, so had people mired in credit card debt. Counseling and debt education seemed appropriate, so Congress made counseling mandatory before a debtor could file for bankruptcy. With the creation of an industry devoted to credit counseling came the unscrupulous, hoping to make an easy buck at the expense of the ignorant.
Legitimate counseling agencies should act as a go between between you and your creditors, offer advice on credit management and sage guidance on budgeting. But there are plenty of so-called agencies that are interested only in your money and not your future. A Mesa bankruptcy lawyer can help you find a legitimate credit counseling agency to fulfill your mandatory counseling obligation and to help you understand the situation you are in.
Many of these "less than legitimate" agencies actually produce very few results. And not cheaply. Up front money is one of their standard operating modes and can be more that $1500, in some cases. Then, once they have your money in their paws, they vanish leaving behind only an empty store front or unanswered calls.
A Mesa bankruptcy lawyer can help you understand the warning signs in looking for a counseling agency and offer this advice:
1. If it sounds too good to be true, it probably is. An old adage, but very true here. Beware of miraculous cures and unreasonable sounding promises.
2. No up front fees. No reputable company will ask for fees up front. The first consultation should always be free and other visits a small, monthly fee.
3. Do your homework. Before engaging an agency on your behalf, check with the Better Business Bureau or your state's consumer advocate office. Any reported conflicts should have been resolved satisfactorily and in a reasonable amount of time.
4. Beware of high fees. Any high fee or other requested payment that seems unwarranted probably is. No reputable agency should ask for any payment other than the agreed upon monthly fee.
5. Confirm payments with creditors. Some counseling agencies require customers to send in a lump sum monthly that will be divided among creditors. Give those creditors a call on your own to verify that they did indeed receive payments.
There are several ways to be sure the agency you choose is legitimate and those methods listed below are tried and true. A Mesa bankruptcy lawyer can also provide you a list in your area. The National Foundation for Credit Counseling's website offers many sources of advice and articles on credit counseling and how to choose an agency.
Non-profit agencies are always the best choices. There are reputable for-profit organizations as well, but weeding out the bad from the good may be more difficult. A really good agency will offer education as well as counseling, debt consolidation and mediation. After all, once the debts are satisfied, you will want to know you have the knowledge and tools to move on successfully.
Carefully read any agreement from your chosen company. All terms of the agreement should be plainly set forth including any fees, services to be rendered, payment terms, total cost, the length of time required for results, any guarantees offered and the business' name and address.
And remember, if it sounds too good to be true, it probably is. Contact any Mesa bankruptcy lawyer for further information.
When faced with overwhelming debt and the possibility of bankruptcy, a Mesa Bankruptcy Lawyer can offer advice and help get your financial situation back under control.