SOME THINGS YOU PROBABLY WANT TO AVOID:

Loan Consolidation

In general, consumer loan consolidation involves using the equity in a homestead as collateral for a loan used to pay off unsecured credit card debt. It very rarely makes sense to convert an unsecured obligation (credit card debt) to an obligation secured by your homestead.

It is a good idea to discuss your situation with a lawyer BEFORE you sign up for a consolidation loan.

Debt Settlement

Though debt settlement strategies are similar to a Work Out, there are important distinctions to consider. Only a licensed attorney is qualified to give you advice about the differences between a pre-litigation settlement negotiation (debt settlement) and a comprehensive pre-bankruptcy work out strategy.

It is a good idea to discuss debt settlement with an attorney BEFORE you enter into an agreement with a debt settlement company.

Don’t commit fraud

This is as good a time as any to re-state the obvious. Borrowing money with the intention of defaulting is fraudulent. It is a form of theft by deception. General civil law and bankruptcy law each contain measures to prevent and/or punish this kind of activity. Keep in mind, the law provides a variety of protective devices for Borrowers who hit a bump in the road and experience real financial hardship. Those protections disappear if the law discovers that a Borrower is abusing the process.

The offer that is too good to be true

Consumers should watch out for unscrupulous lenders and collectors. The loan agreement controls what you owe and when it is due. Common law and legal statutes control what a lender or collector can do to collect. If a lender offers something that sounds too good to be true, it probably is. Discuss the offer with a lawyer.

There are state and federal regulations on what collectors can do if you are unable to pay. Take action if you believe you are being unfairly harassed. Too many calls in a day, foul language, and calls at odd hours (too early and too late) are examples of harassment.