QUESTION
Once a debt has gotten to the point of wage garnishment, is it worth trying to go through a credit counsellor or is it better to file bankruptcy?
Asked on Oct 12th, 2012 on Bankruptcy - Michigan
More details to this question:
I have a single debt of $5600.00 and then some additional debts of around $400. I wonder if going through a debt counsellor can help reduce the fees or balance of a debt that has gone to garnishment. I am not sure in the end which option would help my credit.
4 ANSWERS
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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The only credit counselor you should consider is one approved by the National Foundation of Consumer Credit Counselors: www.NFCC.org. Most of the rest are scams.
Answered on Oct 15th, 2012 at 4:43 PM
Family Attorney serving Henderson, NV
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Harris, Yug & Ohlinger
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In my experience, once a debt has gone to garnishment most creditors are past the point of making a deal. This is a point at which many folks file bankruptcy.
Answered on Oct 15th, 2012 at 3:13 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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Financially, it may not make sense to file as it will cost you, if you go through Counsel anywhere from 1000 to 2500 plus filing fee of 306 and credit counseling of 70.
Answered on Oct 15th, 2012 at 2:50 PM
Credit counseling is equivalent to filing bankruptcy for credit score purposes; bankruptcy is the most effective between the two. It costs about $1200 to file bankruptcy. Therefore, it is probably not worth filing bankruptcy only for a $6K debt. You may qualify to file bankruptcy , but it is probably not worth it for a $6K debt. Alternatively, you could try to work out a payment amount with the credit card company for an amount less than the garnishment, or negotiate a payoff amount approximating 50% of the amount. Bankruptcy will impact your credit for a few years.
Answered on Oct 15th, 2012 at 2:47 PM