The hidden dangers of working with debt relief companies

Many people encounter challenges with money during the busy holiday season. Once the New Year starts, they have to find ways to pay for some of the expenses that they have incurred over the past few months. For those on already tight budgets, these extra bills can make it very difficult to make ends meet.

Some of these individuals may look for assistance in meeting their financial obligations. They may decide to work with a debt relief company after these organizations promise to help them eliminate their debts because they are afraid of filing for bankruptcy. What they often fail to realize is that many of these companies do not provide the debtors with the help they need, resulting in the individuals being in a much worse financial position.

These companies will charge very high fees to work with these debtors. These costs place an even greater strain on individuals who are having serious financial problems. Once these fees are paid, the companies will advise the debtors to stop paying certain bills. The companies will collect these funds, and in many cases, they are not applied to any of the outstanding debts. Because these debts are going unpaid, the late fees and penalties can add up, leading to even more debt for these individuals.

As a result of these practices, many people have fewer options available to them after working with a debt relief company. They may be facing very demanding creditors who are not willing to make any alternate arrangements to repay the bills.

When this happens, the debtors usually will have to file for bankruptcy. Unfortunately, if they had considered this option right away, they may have been able to start rebuilding their finances sooner. Once a bankruptcy is filed, the automatic stay goes into effect. This means that any actions against the debtor will stop while the bankruptcy is ongoing, which is a very important benefit in filing.

When you begin to experience difficulty paying your bills, it is important that you take action immediately to preserve the options may be available to you. No one wants to find out that they made the problem worse by waiting to address these issues.

You should discuss your concerns with an experienced bankruptcy attorney to begin taking the steps toward regaining control over your financial situation. An attorney will be able to examine your financial problems and help you determine the best course of action, which may or may not include filing for bankruptcy protection. If bankruptcy is not the right choice for you, your attorney can work on your behalf to reduce your debts, and put you in the right position for a solid financial future.