The Wall Street Journal recently reported about a New York musician whose greatest investment was a caller ID box with a ring controller; he was saddled with debt.
The man successfully negotiated a 69 percent reduction in his $54‚000 in credit card debt‚ but he was blasted with 40 to 50 automated calls a day. Millions of Americans are facing the same harassment as the economy continues to struggle‚ people lose their jobs and creditors come calling.
But one solution to ending the madness is bankruptcy in Los Angeles. By filing for bankruptcy‚ collections agencies are no longer able to call you. Once they are notified of the filing‚ they must cease harassment and attempts to collect money because your case is now in bankruptcy court.
The whole purpose of these pro-consumer laws is to help people who have gotten into debt without a way out. A big initial benefit is the consumer no longer has to deal with the automated calls‚ the threats of wage garnishment or repossession‚ the letters‚ the e-mails‚ the embarrassment of co-workers asking you why creditors are calling and other hassles.
But the bigger benefit is that a person’s debts can be discharged‚ leaving them breathing easy as they move on with life without the drag of thousands in credit card debt. Consulting with an experienced Los Angeles bankruptcy lawyer should be your first step if you are struggling financially.
The advice and counsel an attorney can give can help you make smart decisions about your financial future. Bankruptcy may be the best option‚ although it’s possible that counseling or debt negotiation may work. A lawyer with knowledge of the pros and cons of all these options can help you in your case.
According to the news report‚ there was a 1.8 percent annualized July decline in consumer credit‚ which was the 19th reduction in the last 21 months‚ going back to September 2008. The numbers show just how long it takes for debt to be paid back and how reluctant borrowers are to take out new loans with big banks.
Creditors‚ who are sending out credit card offers by the truckload‚ are still being very picky about whom they lend to‚ which will make the economy slow to recover. The 14 percent drop in the country’s trade deficit shows that residents aren’t buying imports with their former zeal.
In this case‚ the musician was able to deal with the harassment for three months after he stopped making payments on his credit cards and in the following two months received settlement offers of 50 cents on the dollar of what he owed. He was able to negotiate down to 31 cents on the dollar‚ on average.
But this man is an exception for two reasons. For one‚ many people don’t have the skills or ability to successfully negotiate debt with a credit card company. These companies‚ like any other business‚ are out to make money. Negotiating debt can be tough.
The other reason is that the barrage of calls from debt collectors‚ their threats about legal action‚ credit scores and other warnings can lead people to give in and make a minimum payment‚ which just balloons the unpaid balance with higher interest rates and penalties.
Other debtors may fall into the traps set by the more than 2‚000 debt-relief companies that have formed since the recession crippled consumer finances. These heavily advertised companies used to charge up to 15 to 20 percent of what was owed before laws outlawed that practice. In each case‚ speaking with an attorney about your options is the best course of action.
Cal West Law, will provide a free consultation to help guide you in making a decision that works for you. In Encino‚ Glendale‚ and Los Angeles‚ just call (800) 568-0707.
Limiting Psychological Damage From Collections‚ by Michael Casey‚ SmartMoney