Bankruptcy Lawyers Serving Clients Throughout Warren County and Butler County
If you are overwhelmed by debt, you have probably noticed the television and radio commercials for debt consolidation and debt settlement services that claim they can help you. At the law firm of Harold Jarnicki & Associates, we have seen the unfortunate effects of the unfulfilled promises these companies make. A significant portion of our clients are people who have already tried a debt consolidation or settlement service only to find that the service either did not help at all or actually made their situation even worse. Many times, people will pay these services for months or years and still not get out of debt. They may even get sued by a creditor they thought was being paid off.
With more than 35 years of experience on our side, our attorneys know how to solve the debt problems often caused by misleading debt consolidation companies. We also believe it is important to educate people about the true nature of these services.
What Can a Debt Consolidation Service Do?
Essentially, debt consolidation and debt settlement services can do as much as you can do on your own. They can call your creditors and ask for lower interest rates. They can request late fees or a portion of the debt to be forgiven. None of these services are worth paying for, as anyone can call the credit card companies to do this.
There are two major problems with these debt consolidation services. The first is that this takes a lot of time and money. During this time, your financial situation is most likely getting worse. If the service does not come through for you in the end, you have missed opportunities to find a real solution. Worse, you are out even more money.
The second problem is that these services do not have any actual legal authority. They are most likely not attorneys and cannot provide you legal protection from your creditors. If the debt consolidators get creditors to agree to a settlement, there is often nothing stopping the creditors from changing their minds and coming after you for the full amount.Unlike bankruptcy, the debt consolidations and settlements simply do not legally protect you from all of your creditors.
What If a Debt Consolidation Service Actually Does Help?
It is possible that some debt consolidation services can help you. However, there are secondary issues that could arise. For example, if they are successful in getting a creditor to forgive a large portion of your debt, you may end up being taxed on the amount of the settlement. In other words, when you or a debt consolidation company settles your debt for less than what you owe, the IRS will likely tax you for the difference between what you owed and what you settled the debt for. So even though you were relieved of some debt, you will likely owe the IRS on next year's tax return. Unlike debt settlements and debt consolidations, in bankruptcy, there are no tax consequences for eliminating the debt.
We are lawyers. The solutions we provide are solid permanent, immediate and under the protection of the Federal Bankruptcy laws. We encourage you to discuss bankruptcy with us before considering a debt consolidation or debt settlement service. Even if you are already enrolled in one of these services, it is not too late to know your options regarding bankruptcy.
Contact Us For Your Free Initial Consultation
To discuss your case with one of our Cincinnati and Dayton debt consolidation attorneys, contact us today.
