Sacramento bankruptcy & injury law blog

Debt Consolidation Scams

Beware of debt consolidation scams. Not exactly Shakespearean advice, but it is a worthwhile tip. Those in debt are also in need. They are in need of getting out of debt. When you can't afford the debt you have, there are few options available. This is particularly so for those on a fixed income That's most of us. Elderly are commonly considered those on fixed incomes. But that category applies to all who make a set income. So if you earn a salary, you are on a fixed income. There is little to do besides getting another job to get more income. If you work full-time, there is little to no time left to moonlight.

What then to do? If you find yourself with a set amount of income, and debt beyond your ability to repay, there is only one option. That is to reduce or eliminate your debt to get out of your financial hole. But how? You could pay it off with savings. That, though, is rarely doable. If you had savings, you probably wouldn't be in debt in the first place. Beyond that, you must seek ways to reduce or eliminate your debt. Again, how? Debt consolidation is a common media pitch. So, too, are debt consolidation scams. This news story reflects the bottom-ot-the-barrel example of debt consolidation scams. But it is a cautionary tale. It is also not an isolated instance.

Debt consolidation scams are more common than most would consider. They are not always as egregious that news story. But, however viewed, there are many examples of scam artists seeking to separate you from your money. All done to prey on your need to reduce your debt. Some of the more subtle scams stem from the credit card industry. Many debt consolidators are owned by the credit card industry, sometimes referred by credit card companies when you encounter difficulty with your debt. Their mission, though, is to reduce their own debt, not your debt.

Evaluate your debt options by contacting me for a free consultation to consider bankruptcy. 

Credit Card Debt Forgiveness

Credit Card Debt Forgiveness

Are you in credit card debt?  If so, you are not alone.  Credit card debt is on the rise, and it is growing.  Take a look at this CNBC story to see the rise.  Credit card debt forgiveness is also increasing.  But how?  Why?  Credit card debt that cannot be repaid is a problem.  If you can't pay it you have limited options.  One of them, however, is to ask for the debt to be forgiven.  Even if only part of it.

Credit card debt forgiveness is available directly through creditors.  Asking a credit card company to forgive your debt is a simple ask.  Getting the debt actually forgiven, though, is a different issue.  This recent US News article elaborates the varied aspects of asking your credit card debt to be eliminated or reduced.

If credit card debt forgiveness is offered, there is a catch.  The IRS.  Whatever credit card debt is eliminated is deemed income by the IRS.  You will receive a 1099 for whatever amount of credit card debt you can be reduce or eliminate.

Beware, too, of all debt consolidators.  They are often scams.  Credit card debt forgiveness  in this manner, as such, is rarely worthwhile.  The cons outweigh the pros.

Bankruptcy, therefore, may be a better option for credit card debt forgiveness.  Bankruptcy is a negative on your credit.  It can, however, eliminate your debt, and that is a positive.  It's tax-free, too.  Forgiveness of debt through bankruptcy is not a taxable event.  If you discharge debt in bankruptcy there is no tax to pay.  It's also not a scam like many debt consolidators.  It is a reliable option for those unable to pay their debt.

If you cannot pay your credit cards or other debts, there is already an impact to your credit.  Bankruptcy, therefore, may actually improve your credit by eliminating your debt. Contact my office for a free consultation and see where your options stand.  You have nothing to lose but debt.image.png

Debt or Discharge?

Debt or Discharge?

Debt or discharge, that is the question. But what does it mean?  Simply put, its a decision.  It's a decision whether to live with debt or without it.  Discharge is the end result of a bankruptcy.  When you file bankruptcy, here in Sacramento or elsewhere, you  have debt.  Likely a lot of it.  Enough debt to prompt you to file for bankruptcy.  But, again, why?

Bankruptcy is a legal process that can eliminate your debt.  The end result of a bankruptcy filing is a discharge. Here is an explanation of it from the Sacramento bankruptcy court. A discharge is a legal order from the bankruptcy court.  It orders your debts no more.  Hence the title of this blog being debt or discharge.

Before you get the discharge, you must complete the bankruptcy filing process.  It's not too difficult to do with legal guidance.  But it must be done right.  Otherwise, no discharge.  Then your debt or discharge question is answered for you.  Some of the basic components of a bankruptcy filing are listing your creditors and assets.  You have to put down everyone you owe money.  Even if is Aunt Edna or Uncle Charlie.  Everyone must go onto the list, or schedules in bankruptcy.  Including your assets is an obvious one.  Bankruptcy law allows you to protect, or exempt, your property.  But you have to list it.  

When the bankruptcy filing process is done, the judge orders orders a discharge.  Poof, no more debt or discharge dilemma.  Maybe this is an oversimplification.  But maybe it's not.  The point is you have a choice choice.  There are several facts that lead to debt.  And there are several factors that can lead to a discharge.  Each debtor is different.  But all have options.

Contact my office for a free consultation to evaluate your options.