New York City Bankruptcy Attorney

Many people with debt problems fear filing for bankruptcy because they do not want the negative stigma attached to their credit report. With the recent surge of advertisements regarding alternatives to bankruptcy, such as debt consolidation, many consumers have questions about these options.

At the Law Offices of David I. Pankin, P.C., we help clients understand the differences between bankruptcy and debt consolidation. In addition, we work to make sure they understand the differences and make an informed decision about their financial future. Contact our bankruptcy law firm for a free consultation.

Debt Relief:

Advertisements claim debt relief agencies can significantly reduce the debt that you owe. Debt relief agencies negotiate with your creditors to establish a lump sum settlement (a reduced amount of your debt) which you will pay to creditors.

Debt Counseling/Credit Counseling:

Similarly, advertisements claim you can significantly reduce your debt through debt counseling. Credit counseling agencies negotiate with your creditors to establish a debt settlement for a reduction in the amount you owe. However, rather than one lump sum payment, payments are made on a monthly basis.

Dispelling Debt Consolidation Myths

What these debt consolidation advertisements do not state is that debt consolidation options, such as debt relief or debt counseling, do not provide legal protection to consumers and have many other flaws:

• Creditors may still pursue debt collection against you
• Creditors may still file legal actions against you
• Creditors may still call you making harassing demands for payment
• Agencies may fail to pay your creditors with the money you turned over
• A negative stigma is still attached to your credit report
• A 1099 tax form may be issued resulting in tax obligations for the amount of reduced debt

In addition, many times, these debt consolidation remedies fail - requiring consumers to file for bankruptcy after all.

Benefits of Filing for Bankruptcy

Filing for bankruptcy is a legal remedy to curing debt problems. Therefore, creditors may only communicate with you via your lawyer. Foreclosures, repossessions, harassing phone calls and any legal actions must stop immediately. Eligible debt is either discharged (under Chapter 7) or reorganized into a repayment plan (under Chapter 13) so you are capable of resolving debt problems without future debt worries.

Dedicated to protecting YOUR rights

Our New York Bankruptcy law firm is committed to helping you regain control of your finances and obtain a fresh start. Contact us by phone at 800-529-5910 to arrange for your FREE in-depth initial consultation. We can further discuss the differences between bankruptcy and debt consolidation and provide the informative advice you need.