Alternatives to Bankruptcy

Debt Settlement Scams

You are an honest person. You are desperate to find a way to pay your bills, but your paycheck just doesn’t stretch far enough. You are robbing Peter to pay Paul.

You see commercials on TV and the Internet promising to solve your financial problems. Your guts tell you the “solution” is too good to be true, but you go against your instincts because you desperately want a solution to your debt problems.

You were right! It is too good to be true!

Most of the debt settlement companies you see on TV or the Internet are illegal. Only a Kansas attorney or a credit services organization approved by the Office of the Kansas State Bank Commissioner can legally perform debt management services for a Kansas consumer. About 30 companies are approved. Most are not.

It is illegal for an unlicensed company to charge you a fee to take your money, hold it in escrow, not pay your creditors, then, once the debts are unpaid and delinquent for months, offer your creditors a partial lump sum settlement of the debt. These are debt settlement scams!

I posted about the Kansas consumer protection law on the Bankruptcy Law Network.

Don’t despair. If you are paying an illegal debt settlement company, you might be able to get your money back. We can help you stop the automatic withdrawal from your bank account. We can demand a refund for you.

Legitimate Debt Management Plans

If you are able to pay your bills back through a debt management plan, contact Kansas consumer credit counseling services. Don’t send your hard earned money to out of state strangers you find on TV and Internet!

Housing and Credit Counseling, Inc., in Topeka, Lawrence and Manhattan

Consumer Credit Counseling Service, Inc., in Salina and Wichita

These two agencies can help you analyze your realistic ability to pay and can give you a frank assessment of your likelihood of success. They might be able to get creditors to voluntarily reduce interest, stop late fees and reduce monthly payments, but they probably won’t be able to get creditors to take less than you owe. Creditors cannot be forced to participate in a plan. Some creditors refuse. If you are lucky enough to have creditors who will cooperative, and you can pay your debts back at a`monthly rate you can afford, and you will have the bills paid off in a reasonable period of time, then you should consider a debt management plan through a Kansas credit counselor.

But if your creditors won’t agree to a debt management plan or the plan leaves you insufficient money to pay your necessities such as your housing, food, health care and transportation, you should consider filing for bankruptcy. You can expect these Kansas agencies to be be honest with you, even when they have to give you the bad news that a debt management plan won’t work for you. Both agencies are approved by the U.S. Trustee to issue bankruptcy certificates.

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