New York Bankruptcy Lawyer Blog

In response to questions we received from clients and prospective clients in Manhattan, Bronx, Brooklyn, Queens and Westchester, in a series of 4 posts we are exploring the most common alternatives to personal bankruptcy for New Yorkers faced with money problems.

A prior post on our blog I Live in New York and Am Considering Bankruptcy -- Should I Try Negotiating with My Creditors First? covered negotiating directly with creditors and/or collectors.

Another prior post on our blog I Live in New York and Am Considering Bankruptcy -- Should I Try Debt Settlement First? addressed so called debt settlement or debt negotiation.

In today's post we will explore credit counseling. Future posts will explore other alternative to bankruptcy.

Credit Counseling

The Credit Counseling industry is more reputable than the so called Debt Settlement - Debt Consolidation - Debt Negotiation industry, in part because as a result of the amendments to the Bankruptcy Code in 2005 every individual debtor who wants to file for personal bankruptcy has to complete a credit counseling course from a credit counseling agency approved by the Office of the United States Trustee — which is part of the U.S. Department of Justice. Each federal judicial district has a list of authorized credit counseling agencies (you can find this list through the Bankruptcy Court’s website in your district).

Continue reading " Is Credit Counseling Something I Should Try Before Filing Bankruptcy in New York? " »

New York is expensive place to live. We have higher rent, higher taxes, and higher utility bills than many other parts of the country. Many people in Queens, Brooklyn, Manhattan, Long Island and Westchester are feeling the pressure of higher gas prices, higher food prices and stagnant wages. Faced with mounting credit card debt and other bills filing a personal bankruptcy case, whether chapter 7 or chapter 13, may or may not be the right solution depending on the circumstances. In a series of posts we are exploring alternatives to bankruptcy.

A prior post on our blog I Live in New York and Am Considering Bankruptcy -- Should I Try Negotiating with My Creditors First? addressed negotiating directly with creditors and/or collectors.

In today's post we will explore so called debt settlement or debt negotiation programs. Future posts will address additional alternatives.

Debt Settlement — Debt Consolidation — Debt Negotiation

The so called Debt Settlement — Debt Consolidation — Debt Negotiation industry is driven by advertising and high pressure sales tactics. It is not regulated in many states and is generally not licensed. Many of our bankruptcy clients have had disastrous results with debt settlement companies. The problem is that they advise you to stop paying ALL of your creditors and make payments to them (the debt settlement company). They send out a proposal to all of your creditors. In the meantime there is absolutely nothing whatsoever from stopping your creditors from suing you.

Continue reading " Should I Try Debt Settlement First Before I file Bankruptcy in New York? " »

Many New Yorkers are feeling the pressure of the high cost of living in Manhattan, Bronx, Brooklyn, Queens, Westchester and Staten Island and a painful combination of some or all of the following: high mortgage debt, high credit card debt, high gas prices, high medical bills, student loans and other debts are exploring their options. Filing a personal bankruptcy case, whether chapter 7 or chapter 13, may or may not be the right solution depending on the circumstances. Bankruptcy is not a panacea (cure all) and should not be viewed as the solution to every personal or business debt problem.

In a series of 4 posts we will explore the most common alternatives to personal bankruptcy, which are (1) negotiating directly with creditors and/or collectors, (2) so called “debt settlement” or “debt consolidation”, (3) credit counseling, and (4) doing nothing (ignore problems and hope they will go away).

In today's post we will explore negotiating directly with creditors and/or collectors.

Negotiating Directly with Creditors and/or Collectors

This is certainly an option that should be explored. One problem for many debtors is that they often have too much overall debt to work out a payment plan with each creditor individually. If a debtor has a compelling hardship (such as major injury, illness and/or death in family affecting income, natural disaster, etc.) creditors may be willing to work with a debtor in reducing debt or permitting payment over time. Even without a major hardship some creditors may be willing to grant concessions.
If the debt has been turned over to a collection agency you should be aware that collectors are very aggressive in seeking payment (that is basically the essence of their job). Debt collectors typically will not agree to much in the way of discount or to stretch out payments by very much. Bankruptcy clients of ours often say they tried to work out a deal involving small payments over a long time (such as $50 a month for 3 years) and the collectors they dealt with simply were not interested. However, each collection agency and collector varies.

Continue reading " I Live in New York and Am Considering Bankruptcy -- Should I Try Negotiating with My Creditors First? " »