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Consumers need to be selective when seeking debt relief help

It is not uncommon for New Jersey consumers to find themselves overwhelmed with debts after unforeseen expenses, job losses or other causes. There is nothing wrong with seeking help with debt relief, but the companies from whom help is sought must be carefully scrutinized. The marketing of debt settlement companies can be misleading and often omits important information.

These companies promise to arrange settlements, and they require the consumers to stop paying creditors directly, but, rather, they tell them to put money into escrow accounts from which creditors will be paid once settlement agreements are reached. However, this allows debts to become delinquent and does not stop harassment by debt collectors. These companies sometimes fail to inform clients that they cannot prevent enforcements, such as wage garnishments, repossession and more, as there will not be an automatic stay as is ordered when a consumer files for bankruptcy.

Also, consumers may not be aware that debt settlement companies are not permitted to ask for any fees before debt settlement agreements have been negotiated. They may also neglect to inform the client of the other debt relief options, such as credit counseling, debt management and bankruptcy. Debt settlement companies often mislead clients by creating the impression that the company will provide legal counsel for them, and they may also falsely promise to settle all debts and to protect a consumer's credit score.

Sadly, trusting the wrong company to handle one's debt problems may lead to even bigger problems. An experienced New Jersey bankruptcy attorney may be the appropriate person with whom to discuss debt relief options that will provide the opportunity to regain financial stability. A skilled lawyer can explain the pros and cons of the various options, along with the protections offered to consumers by the U.S. Bankruptcy Code.

Source: marketwatch.com, "10 things debt-settlement companies won't tell you", Elizabeth O'Brien, Accessed on Aug. 19, 2016

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  • NACBA | National Association of Consumer Bankruptcy Attorneys
  • NACA | National Association of Consumer Advocates
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Goldman & Beslow, LLC

Goldman & Beslow, LLC is a Federal Debt Relief Agency by an Act of Congress. We have proudly assisted consumers seeking relief under the U.S. Bankruptcy Code for over 38 years.

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