Why debt consolidation companies are not a good alternative to bankruptcy

Debt consolidation companies tell you that they can make deals with the banks and settle your credit card debts. Understand that they start taking your money even before they make any contact with the banks. There is absolutely no guarantee that the banks will take their offer. These salespeople take your money and promise to “try” to negotiate deals for you. Understand that credit card companies will probably not want to negotiate; and, even if they do agree to negotiate, they can always change their minds later and sue you for the full amount. Be wary of these companies as they are very good at making promises but very rarely do they follow through. I have many clients who come to me after paying a lot of money to these companies only to be hit with a lawsuit from one of their creditors. After clients are sued, they are shocked and feel betrayed as they thought that the debt consolidator had it all under control. Then they find out that after 6 months of payment to the debt consolidation company, the consolidator has not made any headway on their case and all of their creditors are looking to take more aggressive steps. As an attorney, I can make the lawsuit STOP. The reason that this company told you not to file bankruptcy is because it doesn’t have lawyers so they cannot offer you bankruptcy services. If you are currently paying or considering paying a debt consolidation company to help you to negotiation your debt, make sure that you check out your options, call Seelinger Law now for your FREE CONSULTATION.

How often is a bankruptcy case successful?

In a Chapter 13 Bankruptcy, you must make your payment to the trustee each month. This will be a set amount that will be determined by your attorney based on current bankruptcy law and then confirmed by the judge. If you lose your job or lose significant income, you may be able to convert your case into a Chapter 7 and still receive a discharge.

The simplicity and speed of a Chapter 7 filing is such that a majority of the cases receive a discharge. Actually, a “majority” doesn’t quite get the point across. More than 99% of cases, based on current data, have the filer’s debt discharged. This means that if you file, you have a very good chance of emerging debt free, with the exception of car payments, mortgages, child support, certain taxes, and child support.
How will I find out if MY filing was successful?

A “Notice of Discharge” will come to you from the court approximately two months after your meeting of the creditors. It will not list which debts have been discharged in your specific case but instead will give you basic information on the types of debts that are discharged, and the types that are not. Your attorney will be able to explain in further detail. Your creditors will also receive this discharge order. In most Chapter 7 bankruptcy cases, all of your debt is discharged with the exception of taxes, student loans, and domestic support obligations.

Why are there so many people with money problems?

Over time, people tend to build up large amounts of debt, with the full intention of paying it back. As people stay longer in their jobs, their pay goes up, and they are completely confident at the time of the decision that they will not have any trouble with these payments. Unfortunately, in these uncertain times there has been a large shift in the economy and lifestyle, people are losing jobs and either living on unemployment, or accepting jobs that are lower paying than their previous positions. At the same time the price of everyday necessities such as utilities, gas and food are going up due to inflation. In other words, pay is remaining stagnant or falling while expenses are rising, an equation for disaster. Failed small businesses and unexpected medical expenses are just two more of the myriad of reasons that people can get behind on their payments.

During these difficult times in individual’s lives, the banks add to the problem by charging late fees, over draft fees, and raising interest rates, causing further issues, until people are placed in a hole too deep to get out of by themselves. The hardest part is putting your hands up in surrender and admitting that you need help. Call Seelinger Law today at 814-824-6670 to get your FREE CONSULTATION and stop paying today.


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Erie, PA 16509


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Pittsburgh, PA 15212

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