Before signing up with a debt consolidation agency, you should educate yourself about its methods. You may pay thousands of dollars in fees and debt payments, only to end up facing a collection lawsuit. Working with a debt consolidation agency may force you into a corner and set your life back by years. You have better debt relief options, and a lawyer at Prescott & Pearson, P.A., can show you how.
Discuss your debt relief options with an experienced lawyer from our firm. We have decades of experience representing Minnesota clients in a range of bankruptcy and debt relief solutions. We can spell out the advantages and disadvantages of each option, and how our firm can help you get the debt relief you need.
How a Debt Consolidation Agency Works
Debt consolidation agencies promise debt relief by reaching agreements with creditors to accept payments over time. Most agencies make you pay their fees first, before your creditors get a cent. There are many disadvantages to signing up with a debt consolidation agency:
- Interest and fees continue to accumulate — You will end up paying interest on interest, and your debts will continue to grow. A bankruptcy filing on the other hand will stop interest and fees from accruing.
- Not all creditors may agree to participate — Nothing compels a creditor to agree to a debt consolidation arrangement. In a bankruptcy though, creditors must accept a debt repayment plan approved by the court.
- You could be subject to foreclosure, repossession and a lawsuit — If just one creditor files a collection lawsuit, you could be completely exposed. Bankruptcy puts an automatic stay on foreclosure, repossession, garnishment and collection actions.
- Debts may not be discharged — Some creditors may agree to forgive debts, but only bankruptcy can force the discharge of debts.
- Forgiven debt may be taxed as income — By contrast, debts discharged through bankruptcy are not taxable.
- Debt consolidation agencies are unregulated — They can make promise after promise, and not have to deliver. A bankruptcy attorney, however, is licensed and held to high ethical standards.
Get the Straight Facts
At Prescott & Pearson, P.A., we provide objective facts and advice concerning debt relief options, including non-bankruptcy debt relief solutions. In a free consultation, a lawyer can review your situation and explain your options.
"This Is All We Do, and We Do It Well."
Free Consultation With an Attorney
- Minneapolis-St. Paul Area: 651-968-8096
- Minnesota Toll Free: 888-366-0827
Call or contact us online for a free consultation about your debt relief options. Prescott & Pearson, P.A., serves clients throughout the Minneapolis-St. Paul area and Greater Minnesota.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.