What is the difference between debt consolidation and federal bankruptcy?

Interviewer: To get them, and this is the principle difference between just a consolidation place and the protection of the federal bankruptcy laws.

David Siegel: You talk – there’s a misconception out there that debt consolidation is going to bring this tremendous protection and consolidate all the debt, and give you one place to pay, and lower your amount. The problem with that is debt consolidation does not have the backing of the federal law behind it. So if eight out of your ten creditors decide to take the payment plan, but two don’t, and those two sue you and garnish your wages you’ve accomplished nothing. Plus in the past a lot of debt collection or debt consolidation companies have not really helped the debtor in the long run. The debtor has made payments that have gone towards creditors, but also to the collection agent – the collection firm.

Interviewer: As a fee.

David Siegel: As a fee and it hasn’t really brought the relief that the debtor really can get by filing an actual bankruptcy case.

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Видео What is the difference between debt consolidation and federal bankruptcy? канала David M Siegel & Associates