The Law Offices of Gabriel Liberman

Help With Debt

When seeking help with debt, whether personal or business related, there are many organizations and groups peddling their services. Some are legitimate, others less than so. Before choosing a pathway out of debt, it is imperative to fully understand the options you have.

Credit Counseling: In California it is REQUIRED that all clients take part in credit counseling prior to filing for bankruptcy. Credit counseling is designed to help with debt and teach clients way in which they can better manage their finances in the future. There are two sessions which must be completed separately: debtor education and credit counseling. While many organizations advertise “credit counseling,” not all of these are approved by the department of justice. Be sure to check with legal counsel before choosing a credit counseling organization. These agencies are permitted to charge fees for their services, but be sure the fees are all listed up front and agreed upon prior to any counseling sessions taking place. A reasonable fee is defined as roughly $50, though this can vary as well depending on the operating costs of the agency and the ability of the client to pay. Sessions typically last 60 minutes, though this too will vary based on the needs and circumstances of the client. Finally, it is important to understand when seeking help with debt that credit counseling will not necessarily have any affect on your credit score. Many companies advertise credit report cleanup, but any such claim is dubious at best. Seek legal advise before paying for services such as these. Consult with a debt solutions attorney to see how help with debt can come in the form of credit counseling.

Debt Consolidation: Debt consolidation is simply taking on a new loan in order to pay off a collection of other previously incurred debts. The interest rate and monthly payment are lower than those of the other debts, helping clients repay debts they would otherwise be unable to afford. Through federal programs student loans can also be consolidated and the interest rate locked in at the current market rates. When seeking help with debt it is important to know that not all consolidation is equal. Some consolidators can actually discount the amount of the loan, so it would benefit the client to seek advice and shop around prior to engaging in debt consolidation. In addition to consolidation clients can attempt to settle their debts. Finally, clients should be aware of the terms of the consolidation. While the interest rate and monthly payments will be lower, the term of the loan will be much longer, making the total paid far higher than would have otherwise been paid.

Bankruptcy: While both credit counseling and debt consolidation are useful tools in the struggle for consumers to get their debts under control, there are cases in which circumstances require a more holistic approach. When this is the case, bankruptcy could be the best way in which to get help with debt. Bankruptcy comes in three primary forms: chapter 7, chapter 11, and chapter 13. Before determining which chapter is right for any particular case, your Sacramento bankruptcy attorney will have to complete a means test. This test will quantify your debt, assets, income, and risk before choosing which bankruptcy pathway would best alleviate a client’s distress. There are tanglible and immediate benefits to petitioning for bankruptcy in California, and you likely have questions. Our California bankruptcy attorneys have years of experience and troves of knowledge concerning financial law.

Help with debt can seem at first to be too great an obstacle. Too many consumers allow their finances to spiral out of control due to nothing more than an overwhelming sense of helplessness. At The Law Offices of Gabriel Liberman we have worked with over 5000 clients and our California bankruptcy attorneys know how to advocate effectively on your behalf. Do not allow your finances to hold your down any longer. Contact our office right now and allow us get you the help with debt you and your family deserve.