Bankruptcy Indiana

"At last!" I said to myself (as a debt consolidation lawyer offering bankruptcy services in Indiana for close to 25 years) upon reading the New York Times article "Peddling Relief, Firms Put Debtors in a Deeper Hole".  Debt relief was the topic of an earlier Times article as well, in which I was quoted along with nine other consumer debt experts from around the country. That was in 2008, but as far back as the beginning of my posting articles online under Bankruptcy in Indiana, I warned clients and readers about "looking for help in all the wrong places".

The most recent Times article (one of the Columbus bankruptcy lawyers from the Zuckerberg bankruptcy law office there had clipped the article and faxed it to me immediately) actually calls most debt relief firms (also known as debt settlement firms) "predatory saviors", reporting that the Federal Trade Commission has proposed banning upfront debt settlement fees, and capping all fees charged by the approximately 2,000 debt settlement firms around the country. 

The typical arrangement offered by debt settlement firms is this:

• The person needing debt help pays money every month to the debt settlement company, to be deposited into a special "trust" account.
   
• When the debtor has accumulated enough money in the account, the debt settlement company promises to work out a lump sum "deal" with creditors for less than the amount owed.

The two big problems with this arrangement are: (You don't need to be a bankruptcy attorney in Indiana to figure these out!)
 

• Large upfront fees are taken by the debt settlement company out of each deposit the customer makes.
   
• Meanwhile, the credit card account continues to pile up late charges and interest, making the situation even worse.

Exactly as I've been saying for years to people needing Indiana bankruptcy help but who are trying to run away from their problems, the debt settlement route too often turns into a "win", but only for the debt settlement company! For the debtor, it's often a lose-lose proposition. The so-called "bankruptcy alternative" turns out to lead to bankruptcy, only with months and years of heartache and heartbreak in between.

"At last!", I felt, reading in the Times article that lawmakers and attorneys general are starting to understand what I've been explaining all along!