Jump To Navigation


Posted on November 17th, 2014

Overwhelming debt brought about through unexpected life changes such as unemployment and illness or injury have caused many Americans to seek debt relief through personal bankruptcy. Some people have been lured by promises from debt settlement companies to eliminate debt quickly and easily without any negative effects. According to the National Association of Consumer Bankruptcy Attorneys, over half a million people with $15 billion in debt are currently in debt settlement programs, and only 10 percent of the people in debt settlement programs will actually succeed in reducing their debt.

The struggling economy has left many people seeking ways to resolve financial challenges that include excessive credit card debt and unpaid bills. Some debt settlement companies tell people to stop paying their bills and give money to the settlement company to be used to settle the debt. The usual results are late fees and collection efforts by creditors. This and other abuses were uncovered by federal and state consumer agencies.

A person overwhelmed by debt and threatened with foreclosure can speak with a bankruptcy attorney to discuss options to eliminate debt, stop foreclosure and stop repossession. Chapter 7 bankruptcy can eliminate debt for those debtors who meet income eligibility guidelines. Chapter 7 could require the sale of a debtor’s assets, but a bankruptcy attorney will review the property that is exempt from liquidation under the bankruptcy code and the law of the state in which the debtor resides.

Chapter 13 bankruptcy is for individuals who have a steady income. The debtor is allowed to keep the property he owns, including property that is subject to a foreclosure proceeding and property subject to repossession by a creditor. A debtor repays his debts under a court-approved plan that has manageable payments each month for three to five years. At the end of the plan, the remaining debt balance is discharged in bankruptcy.

Source: Tulsa World, “Consumer Page: Debt settlement plans often backfire,” Phil Mulkins, Oct. 24, 2012

Contact Us for a Free Consultation
Office Locations

Phoenix Office One
Wright Law Offices
2999 N. 44th St., Ste 600
Phoenix AZ 85018

Telephone: 480-845-0145 / 866-703-3287
Phoenix Law Office

Phoenix Office Two
Wright Law Offices
668 N. 44th St., Ste 320
Phoenix AZ 85008

Telephone: 480-845-0145 / 866-703-3287
Phoenix Law Office

Scottsdale Office
Wright Law Offices
7135 East Camelback Road, Ste 230
Scottsdale AZ 85251

Telephone: 480-845-0145 / 866-703-3287
Scottsdale Law Office

Tempe Office
Wright Law Offices
2238 S. McClintock Dr.
Tempe AZ 85258

Telephone: 480-845-0145 / 866-703-3287
Tempe Law Office

Avondale Office
Wright Law Offices
12725 W Indian School Rd, Suite E-101
Avondale AZ 85392

Telephone: 623-258-4480 / 866-703-3287
Avondale Law Office

Mesa Office
Wright Law Offices

4856 E. Baseline Rd.
Suite #104
Mesa, AZ 85206
Telephone: 480-845-0145 / 866-703-3287
Mesa Law Office

Glendale Office
Wright Law Offices
20325 N. 51st Ave., Suite 134
Glendale, AZ 85308
Telephone: 623-258-4480 / 866-703-3287
Glendale Law OFfice

Facebook IconTwitter IconVisit Us On Google+Visit Us On Google+