Falling behind on the bills is not a pleasant feeling. In fact, it may seem as if the debt will smother the borrower, making it difficult to sleep or affecting one’s ability to relate with loved ones. When overdue debt reaches the point where creditors are calling, accounts are in the hands of collectors and credit scores are damaged, a Connecticut borrower may reach out in desperation. While Chapter 7 bankruptcy may be an option, some may try other methods of debt relief that may only make matters worse.
Debt settlement companies, for example, seem to offer a solution. However, in many cases, the borrow finds the situation becomes even worse. For one thing, debt settlement companies instruct borrowers to stop making payments on their debts and instead send a monthly deposit into the settlement company’s account. Only after the borrower has deposited an adequate amount of money will the settlement company begin negotiations with creditors.
In some cases, the settlement companies use unethical tactics of negotiation, which may damage the borrower’s chances of gaining leniency from the lender. Additionally, settlement companies typically deal with credit card debt. This is not helpful to those who have a home in foreclosure or a vehicle at risk of repossession.
Some choose the debt settlement route because of the potential damage a bankruptcy does to their credit scores. However, Connecticut consumers can begin rebuilding their credit scores almost immediately after filing for Chapter 7 bankruptcy. The assistance of a compassionate and dedicated attorney can guide them through this process.
Source: nerdwallet.com, “How Does Debt Settlement Work?“, Bev O’Shea, Accessed on Sept. 9, 2017