Bankruptcy Scams to Know

man opening empty wallet

We’ve discussed the types of fraud that can occur when you have filed for bankruptcy while racking up credit card debt or transferring funds to others. But did you know scammers also prey on those who have filed for bankruptcy? Here are bankruptcy scams you need to know.

Chapter 13 Bankruptcy Scams

The most common bankruptcy scam occurs with Chapter 13 filings. Here, a letter is sent on what seems to be official letterhead which contains details about the notification of debt relief. Within the letter, there are details of the bankruptcy being dismissed. From there, the letter explains that the letter receiver has 24 to 48 hours to discuss the bankruptcy dismissal and what steps they need to take next.

Not only does the letter include urgent timestamps, but it may even include details like the bankruptcy case number to make the individual believe the letter is real.

However, if your case is dismissed you will be notified by the court and/or your bankruptcy attorney. Unfortunately, these scammers are actually debt settlement companies that prey on your willingness to accept dismissal. From there, the debt settlement company will try to trick you into calling them and they will then convince you to voluntarily close your Chapter 13 filing and instead, use their debt settlement company.

If you do fall for this scam, you could be out thousands of dollars and creditors back to wanting their debts paid. Not only will these creditors be more aggressive, but you can also expect lawsuits, wage garnishments, and more. Debt relief doesn’t offer you the protections bankruptcy does.

Debt Consolidation Types

In Columbus, Ohio, the primary debt relief options are debt settlement, consolidation loans, and loan modification.

  • Debt Settlement: Debt settlement is a way to reduce your debts with unsecured creditors such as medical bills and credit card debt. The key to these types of debt relief options is that you must pay your creditors some amount of what is owed.
  • Consolidation Loans: Debt consolidation loans allow you to combine your debts into one loan to reduce your monthly payments.
  • Loan Modification: If you have a loan, you may be able to come to an agreement with your lender to modify the terms of the loan. Creditors benefit from getting payment without having to seize or sell your property.

While these seem like viable options, once you’ve been on track with Chapter 13 bankruptcy, debt consolidation plans can only complicate the matter.

Bankruptcy may seem complicated enough. But when you get tied up with the wrong types of debt settlement companies, it can be anything but a relief.

Give Yourself a Second Chance For a Prosperous Financial Future in Columbus, Ohio

If you are experiencing financial distress or the burden of debts you cannot pay, we encourage you to contact The Jones Law Firm for a free consultation about how we can help you decide what is right for you. With our office located in Reynoldsburg, Ohio, The Jones Law Firm works with clients in and around Columbus and throughout central Ohio. Don’t delay. Your financial future begins now.