National Legal Debt Centers, Inc. – Consumer Alert

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The Debt Crisis is starting to effect many Americans

National Legal Debt Centers (http://www.nldc.us) announced today that a credit crisis has begun. Major credit cards are doubling their minimum monthly payments, adjustable rate mortgages are going up and foreclosures have increased 50% in the past two years. Student loans are due to go up 2% next month, and new bankruptcy laws will drive many debtors into repayment plans they cannot afford. Viable alternatives to bankruptcy and foreclosure need to be made more available to the public.

The new Bankruptcy law limits who can qualify for bankruptcy under Chapter 7, because it permits them to erase their debts after forfeiting their assets. Instead many filers will be forced into a Chapter 13 Repayment Plan. At the same time many homeowners are falling behind on their mortgage payments and face foreclosure. There are alternatives.

Most people do not realize the difference between the various types of bankruptcy and could easily find themselves paying back a large proportion of their debt anyway, forced by the courts to make those payments. Some are even mandated into credit counseling programs and forced into a lengthy repayment plan. So they wind up with a bankruptcy and repay their debts anyway!

Although some types of bankruptcy may get rid of unsecured debts completely and help stop foreclosure on your home, stop garnishments by creditors and debt collection activities, be aware that there are still many areas it does not help with. Bankruptcy will normally not help in areas like child support, alimony, current taxes, and most government-backed student loans, etc.

On top of this, you have also just ruined your credit for the rest of your life. Not only does bankruptcy stay on your credit report for 10 years and stay in the court records for 20 years, but many people do not realize that applications for home loans and many employment forms require you to answer the annoying question: "Have you ever filed for bankruptcy, or had a foreclosure?" So, in effect, it follows you for the rest of your life. A bankruptcy or foreclosure can also hinder you in many major areas of your life, such as finding a job, buying or even renting a home, acquiring insurance, security clearance and buying or leasing a car. They should be considered as an absolute last resort.

Most consumers do not know there are bankruptcy and foreclosure alternatives and that an attorney can help you avoid bankruptcy and negotiate a settlement of your debts. Though there are many different types of debt relief companies advertised, most creditors will not negotiate with them. However, an attorney experienced in handling clients debts, can act on your behalf and help you avoid the devastation of bankruptcy or foreclosure.

Before you decide to do a bankruptcy, or are facing foreclosure, explore your options. Contact NLDC at: http://www.nldc.us

Bankruptcy Alternatives

http://www.nldc.us/debtoptions.html

Debt Elimination Scams... Fraud Warning

http://credit.about.com/od/shamsandscams/a/082504.htm

FTC Consumer Alert:

Advertisements Promising Debt Relief May Be Offering Bankruptcy http://www.ftc.gov/bcp/conline/pubs/alerts/bankrupt.htm

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Jonathan Hernandez
NLDC
877-407-8560
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