In response...

Justafactoflife posted a comment to the previous blog that I would like to respond to.

First things first...
The most important thing to do before going with any debt settlement company is RESEARCH. Research what debt settlement is, how it works, and more importantly --what are the risks associated with it? Once you have a basic understanding, determine how the risks could potentially effect you. Understand the risks associated with the decision you are making and then ask yourself --Is the chance of settling my accounts for pennies on the dollar worth the chance that [negative impact on credit score/ lawsuit/ etc.] might happen?
Also remember that different states have different legislatures and that different outcomes depend on where you are located. For instance, Pennsylvania is a non garnishable state, but neighboring Ohio is not. This means if you live in Pennsylvania, your creditors cannot sue you and win garnishment of your wages. In Ohio, they can take you to court and be awarded a judgement to garnish wages right off the top of your paycheck.

I did not investigate the website mentioned in your comment, however, many websites of this nature are called lead providers. Debtors come along and provide information based on their situation and they sell this information to companies looking for people who potentially need their services. They do not judge any companies based on ethics, honesty or worthiness. They are simply a middle man providing information to those (companies) who are willing to pay.

As far as the costs of services are concerned, put yourself in the position of any debt settlement, consolidation, or management company. Your clientele are people who, for whatever reason, are unable to manage or afford payments to creditors. They are in a financial situation.
Would you want to provide services to someone in a financial situation on the good faith that they will pay you after services are rendered? Especially with risks of lawsuit or inability to settle at the ideal rate?
A good debt settlement company understands that some of their clients are hiring them due to unexpected, unfortunate circumstances, while others are hiring them due to downright financial irresponsibility. It's irrational for anyone to expect another person or entity to render services with no guarantee of payment, particularly to someone already in a financial situation.


Your question to me is whether or not you should file bankruptcy. Please remember, Justafact, I am not an attorney or financial advisor and cannot advise you as to what you should do. I can only give you my opinion based on the information about your situation that you have provided. I cannot be held liable or responsible for anything. Always consult with a professional and weigh the facts before making any important decision of this nature.

Can you tell me a little bit about the company you are paying?
What kind of paperwork does the process entail? What kind of paperwork do they need from you to begin and execute the process? Do they tell you not to make payments? Do they tell you not to talk to creditors?
In the event that they negotiate with your creditor and obtain a reasonable deal for you, how will the creditor be paid? Do they relate the details of the offer and how to pay? Do they utilize an escrow account?
What happens if you are sued by your creditor? Do they stop working with that account entirely?

Johnnie Callsalot says he's with the prelegal team within BOA. We have no real way of determining whether or not Johnnie is really on any prelegal team. Have you received any letters in the mail mentioning any kind of prelegal status?
What this could mean is that they are considering pursuing you in civil court. They may or may not consider beforehand whether the effort is worth it or not.
Do you have any assets?
Your 401K and Social Security income are exempt from any kind of levy or garnishment, so these funds are safe from creditors and it may not be a wise choice to cash out your retirement money to pay these debts off.
Do you rent or own?
If you own, a creditor could potentially be awarded a judgement of a lien against your home. If a creditor were to obtain a lien on your home, this does not necessarily mean you and your wife will be out on the street without a roof over your head. This simply means that you must pay out what is owed to your creditors from any capital gains when you sell your home. If they obtain a lien against your home, they will not be paid until the home is sold. A Sheriff's sale of your home is also a possibility, but not commonplace.

There's a lot more information needed to give an opinion as to whether you should just call it quits and file bankruptcy or not. You may have stood a chance in debt settlement but just went with a bad or wrong company. You may have made the right choice with the company but could potentially be sued in the near future by your creditors.

The road forks in many paths, but I hope you will share what you go through with me and others.