Today, maybe more so than ever, many Americans find themselves struggling with too much debt. With unemployment at a 26 year high, record foreclosures and a financial industry seemingly oblivious to these hardships, countless people everyday find that they can no longer make ends meet and continue to pay their debts. These people are not nameless, faceless, carefree beings that simply chose not to pay their bills; they are good, hard working people stressed with trying to raise and provide for their families in the face of these very difficult times. Bankruptcy is the last thing most people want to consider. 

Enter the “Debt Consolidation/Settlement” agencies. Realizing the current economic and financial environment combined with people’s desire to avoid bankruptcy, Debt Consolidation/Settlement companies are popping up everywhere. And they promise the best of both worlds: pay back your debt, at least a percentage of it, and avoid filing bankruptcy. But do they work? 

A recent article from CNN (see link below) shines some light on these companies and details some new regulations regarding when and how they collect there fees. While the new regulations are very limited (it only applies to companies that use telemarketing to contact people), it is a step in the right direction. Hopefully, as more people become aware of how misleading Debt Consolidation/Settlement companies are, more laws and regulations will be passed that are designed to protect good, hardworking people who are only trying to do the right thing. 

http://money.cnn.com/2010/10/27/pf/debt_settlement_fee_rule/index.htm 

Every Bond and Botes office offers a free, no obligation consultation. This consultation allows you to discuss your personal financial situation with an attorney familiar with debt settlement, credit counseling, debt consolidation, personal finance, as well as bankruptcy. We believe it is always a good idea to educate yourself as much as possible before making any decisions regarding your finances. Deciding how you handle this situation is very important. Let us know if we can help. 

Written by:  Cynthia T. Lawson – Bond, Botes & Lawson, P.C. (Knoxville & Loudon, Tennessee)