Debt Settlement Companies In Michigan

Posted by Michigan Bankruptcy Law Firm on February 17, 2010 · Leave a Comment

It is fairly typicalregular for people to attempt to resolve their credit problems by working with debt negotiation companies rather than talking with a bankruptcy attorney. However, it is important to keep in mind that you do not have the protection of the bankruptcy courts. Generally, it is better to have the protection of the bankruptcy system during a chapter 7 bankruptcy.

What will the credit negotiation company do for your debt troubles in Michigan? First, these agencies will need you to build a itemized list of your outgoing bills. They will then try to work out a negotiation of a part of the balance you owe to the credit card companies. It is important to note that these debt negotiation services take part of your money to make payments to your creditors.

Individuals are trying to protect their credit rating by doing anything to pay off their debt. The negative with these debt settlement services is that you are now sending them funds and they are sending them to the creditor. Some times they do not send out payments on a timely basis and their obligations are not binding so the creditor does not have to abide by the negotiation to accept payments for less.

Saving your credit may be important to you. But, you don’t need a debt resolution company to work out a deal with your creditors. You can do this yourself. Also, you can always file Chapter 13 and make payments to your creditors under the protection of court or Michigan Bankruptcy law. This is often done at a lower rate than what debt resolution services can negotiate. In addition, the court ensures you can afford to pay the agreement. If filing for a Chapter 13 the payments range from 3-5 years based on your income.

Folks often ask if these programs don’t work then why are they still around? They can work depending on your situation. However, you are giving up control of your finances and if you are concerned about your credit, your credit report will still reflect that the account was settled for less than the total debt owed and therefore you are still tarnishing your credit.

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