There are many advertisements on television and the internet for companies offering credit repair services. Unfortunately, many of these services are outright scams.
Credit repair scams that claim to be able to erase negative information from your credit report for a fee are particularly dangerous. While you can ask credit bureaus to correct outdated or inaccurate information, they will not remove accurate information from your credit report, no matter how negative that accurate information is. Also, under the Credit Repair Organization Act, it is illegal for credit repair companies to collect upfront fees before performing any services.
A reputable company that helps you improve your bad credit will notify you of your rights before you begin dealing with them, and will explain the steps you can take on your own to improve your credit. If you need credit counseling to set a budget or to find out how to negotiate with credit card companies on your own, it’s best to deal with only government-approved agencies. Contact the Office of the United States Trustee for a list of these credit counseling agencies; many offer free or low-cost services.
For many persons facing high debt, however, bankruptcy may be the best option. If you do not earn a high income and do not own many high-value possessions, Chapter 7 bankruptcy may be able to wipe out many or all of your debts, including credit card debts, medical bills, past-due utility bills, and other unsecured debts.
If you have a steady income and valuable assets such as home equity, and your debt load is due to a one-time event such as a job loss or high medical bills, Chapter 13 bankruptcy may be a better solution for you. For a Chapter 13 bankruptcy, your attorney will prepare a proposed debt repayment plan based on your income, the value of your assets, and the amount of your debt. Once your plan is approved by the Bankruptcy Court, your creditors will be legally bound by it and will have to stop their collection efforts. The amount of debt you will repay depends on your individual financial circumstances; typically, you will repay only a small portion of your unsecured debt, and the rest will be discharged when you complete your Chapter 13 debt repayment plan.
If you are struggling with overwhelming debt, please contact an attorney who is experienced in handling San Diego bankruptcies. Our bankruptcy lawyers can explain the benefits and drawbacks of bankruptcy, your options under the laws, and the process of filing a bankruptcy case. You can then make an informed decision about what is best for you and your family. Please contact San Diego Law Firm at (619) 794-0243 to find out how we can help you become free of debt.
