Should You Seek a Debt Consolidation Loan?
In or near the Chicago area, if your debts are piling up and you can’t pay them off, should you obtain a debt consolidation loan or the services of a credit repair company? In most cases, no. A more practical and effective way to deal with your debts is having the advice and services of a Chicago debt lawyer.
Credit repair companies are seldom a good alternative to an attorney’s help. Most charge a considerable fee upfront. Moreover, credit repair companies have no legal authority to prevent a creditor from acting against you; creditors will continue to pursue what they are owed.
Do not risk your financial future with a company that cannot stop your creditors. Instead, work only with a Chicago debt relief attorney who can take direct legal action on your behalf.
After reviewing your income, assets, and current financial situation, a Chicago debt relief attorney may recommend obtaining a debt consolidation loan, but you must do the research and borrow only from a reputable, established lender.
What Should You Know About Lexington Law and Similar Organizations?
In December 2024, the Consumer Financial Protection Bureau (CFPB), an independent agency of the U.S. government, began distributing relief checks to more than four million consumers harmed by credit repair brands including Lexington Law and CreditRepair.com.
A CFPB investigation found Lexington Law, operating through several other companies, listed fake real estate and fake rent-to-own listings to lure consumers. When consumers inquired about these non-existent properties, they were informed their credit scores were too low, but – for a price – Lexington Law could help.
Lexington Law and other companies illegally collected fees in advance for their credit repair services. The federal courts have ordered these companies to pay $2.7 billion in consumer refunds, damages, and civil penalties. The courts have also banned these companies from telemarketing their credit repair services for the next ten years.
Can You Avoid Similar Credit Scams?
Do not work with a credit repair company that requests payments upfront, promises to remove from your credit report negative information that is accurate, pressures you to act quickly, or promises specific results. Never give your Social Security number, bank account or credit card numbers, or date of birth to a telemarketer who claims to represent a credit repair company.
Instead, schedule a consultation with a Chicago debt relief lawyer who will help you pay off your debts and defend you against creditor abuse and harassment. A debt relief attorney can represent you against a creditor, file a claim against an abusive debt collector, help you decide on the best option for settling your debts, and negotiate on your behalf.
A debt resettlement plan, refinancing, and debt restructuring are among the possible outcomes of debt negotiation. Lexington Law and similar organizations also promise to negotiate with your creditors, but creditors have no reason to negotiate in good faith with such groups because Lexington Law and similar organizations cannot take legal action on your behalf.
Is a Creditor Suing You for a Debt?
If a creditor sues you, filing for bankruptcy will stop the lawsuit, but going to mediation may be preferable to filing for bankruptcy. Creditors do not want trials, and they usually agree to mediation because of the time and expense that a trial may entail.
If you learn you are being targeted by a creditor with a debt lawsuit, speak with an Illinois debt lawyer about the mediation process. During mediation, your lawyer may propose a payment plan you can live with – in return for the creditor dropping the lawsuit.
You could arrange, for example, a single lump sum payment or a lower monthly payment. Your lawyer will tell the creditor what you can pay each month and may determine a monthly payment amount you can afford that also satisfies the creditor.
Is Bankruptcy Your Only Option?
If a creditor refuses to negotiate with you or your attorney, or if you cannot even afford reduced monthly payments, your attorney will discuss your other options, including bankruptcy.
In Illinois, filing for bankruptcy stops debt collection efforts immediately, eliminates your unsecured debt, and allows you to reorganize your finances and pay your remaining debts.
Although it is a last resort measure that temporarily entails negative consequences for your credit, if you and your attorney determine that bankruptcy is the best way for you to resolve your debts, that attorney will prepare the bankruptcy documents and guide you through the process.
What Does Bankruptcy Require? What Are the Consequences?
A decision to file for bankruptcy first requires a comprehensive assessment of your income, debts, and assets. Do not try to file for bankruptcy by yourself. Any mistakes could delay the process or void your bankruptcy and cost you more in the long run.
Instead, work with an experienced Chicago debt lawyer who will explain the bankruptcy process and help you resolve your debts appropriately and effectively.
Chapter 7 bankruptcy, also called liquidation bankruptcy, may appear on your credit report for ten years from the filing date. Chapter 13 bankruptcy, also called reorganization bankruptcy, usually stays on your credit report for seven years after you file for bankruptcy.
Let Atlas Consumer Law Help You
At Atlas Consumer Law, our award-winning debt relief and bankruptcy lawyers work for families and individuals throughout the greater Chicago area. Since 2003, we have used our skills and knowledge to help our clients resolve their debts, and we are ready to help you.
If you cannot pay your debts or if a creditor is suing you for a debt, contact Atlas Consumer Law immediately at 331-321-4748. One of our lawyers will explain your rights, review your options for resolving your debts, and if necessary, assist you with a bankruptcy filing and explain the bankruptcy requirements.
For more than two decades, we have been successfully resolving the most difficult debt situations. To learn more about your options for resolving your debts – without a debt consolidation or debt repair company – call the Lombard offices of Atlas Consumer Law at 331-321-4748 and schedule your first consultation with us. Our attorneys know how to help you.
