Why MInneapolis Bankruptcy Lawyers Say Filing Beats Consolidation

Paying your bills is what we all want to do. No one likes the idea of not paying debt we incurred. The idea of drowning in debt is scary and the mentioning the “b” word is even scarier. Human beings are all the same. At heart, I believe most of us would rather claw our own eye balls out than not pay our bills. And yet, life interferes with our best plans. 

Life’s events can catapult us into a debt spiral that we never thought was possible. When this happens, Filing Bankruptcy is not most Minneapolis debtors first choice. I get that completely. You are reading a blog from a person with high anxiety. We people with high anxiety fight, claw, and kick, and scream, and then we calm down eventually so we can solve the underlying problem.

So many of our guests first choice is to consider a debt consolidation plan. Many clients feel that trying debt consolidation is the right thing to do. They felt like if they tried debt consolidation and it failed, at least they tried it right? However, what they all found is that debt consolidation was a complete waste of time. Why? Well, that is the subject of this blog. I am going to tell you why nearly every Minnesota guest feels like the debt consolidation plan they tried was a complete waste of time and energy.

Here are 5 reasons why our former guests have said debt consolidation plans were a complete waste of time:

REASON 1: THE CLIENT COULD NOT MAKE THE PAYMENT

The number one reason our MInneapolis Bankruptcy Lawyers clients hated the debt consolidation plan is because they could not afford to make the payment. You see, when you set up this kind of plan and not an easy repayment plan like when you File Chapter 13 Bankruptcy, your family does not eat first, creditors eat first. If creditors get to determine your payment, do you think it will be high or low?

Right, it will be so high you can’t afford to pay your monthly bills with what is left. What is the point of debt consolidation if the payment is not based on what you can afford to pay? Aren’t we all just wasting time if this is the end result? I think so.

Remember, if creditors don’t like what you pay them, they can always break off and garnish your wages instead. What? It’s true. Creditors don’t have to comply with this plan either. Many of the debt consolidation companies are owned by or are a subsidiary of credit card companies.

REASON 2: THE CLIENT WAS BEING SUED OR GARNISHED IN THE PLAN

It happens all the time. The client had the courage to reach out to someone for help. The person on the other end of the phone is a part of the “A” intake team. The dream of being debt free sounded easy enough and the client wanted it so bad. So, based on the promises of the “A” team, they jumped in. The problems started almost right away for most. The creditors still sent them bills which was unnerving enough. But, when the behavior became more aggressive- like threats of garnishments and lawsuits, the clients would always pick up the phone and call back and try to speak to the “A” team.

The problem is they never reached the “A” team again. Now they got the “B” squad which left the client feeling indifferent and often times just plain rude. Believe me when I tell you, if you have made payments for a year to this company based on the “A” teams representations that turned out not to be true, you are going to be one pissed off cat!

REASON 3: YOUR CREDIT REPORT LOOKS HORRIBLE ANYWAY

So, you want to do the right thing and try and pay creditors back in exchange your credit looks terrible anyway. This is true folks. Our Minneapolis Bankruptcy Lawyers clients have found that as soon as they stopped paying their creditors back, their credit score dropped like a rock.

Plus, when you are in a debt consolidation program you are advertising to the world you are in financial distress. So much for trying to make things better. Sometimes trying to make things better makes things worse.

REASON 4: YOU PAY TAXES ON DEBT FORGIVEN

Nobody told me that the debt that is written off will be taxable to me? Oh sure, I am not complaining about the fact that paying taxes on 20k in debt is better than paying 20k in debt but to have shitty credit plus have to pay taxes on debt I could not pay just seems cruel to me.

Debts forgiven is taxable to you. Debt forgiven in bankruptcy is not taxable to you. Do you know how many people have told us they wished they would have known this? A lot.

REASON 5: IT TAKES FOREVER TO GET YOUR LIFE BACK!

Contact A Minneapolis Bankruptcy Lawyer

Oh yes, we all want to pay our bills. Whom among us does not? But when life throws you a curve ball, and either you have 1) a business that fails, 2) income drop, 3) divorce or relationship break up, 4) medical bills, or 5) made bad financial decisions like we all have, your instinct will be to try and avoid the “b” word and do some sort of debt consolidation. All of our guests feel the same way.

When our former guests tried debt consolidation to avoid the “b” word, they felt like they were doing the right thing. However, what they all found is debt consolidation was just delaying the inevitable right choice for their family, to file a bankruptcy and get their lives back immediately.

So many of our Minneapolis Bankruptcy Lawyers clients suffered needlessly to try and avoid the “b” word and in the end suffered much longer than they needed to. We are sorry you are going through this. Contact our Minneapolis Bankruptcy Lawyers today and let us help you get started on the road to a debt free life.