Red Flags: Separating Hype from Reality on Debt Relief Subhead
March 14, 2011
Michael B. Katz, Esq.
Millions of Americans are drowning in debt and desperate for a lifeline, so it’s no wonder ads touting easy debt relief are so alluring. But they can also be deceptive, glossing over the harsh realities and limitations of the debt-settlement industry; in fact, these programs leave many customers worse off than when they enrolled. Solutions to spiraling debt – bankruptcy among them – do exist, financial experts say, but finding the right remedy takes an understanding of all the options and a willingness to accept that there are no easy answers.
Michael Katz keeps a box of tissues behind his desk. And they get a lot of use from the people who sit down to talk with him about their crippling debt, and the reasons – unemployment, divorce, medical bills, or perhaps plain old bad decisions – it has spiraled out of control.
It’s not just feelings of anxiety and helplessness, but often a sense of desperation that brings them to tears – and to promising- sounding solutions, like debt-settlement companies that promise to drastically reduce or eliminate that crushing red tide.
Reality, they often find, paints a far different picture. “So many people I talk to found these agencies through a television commercial or on the Internet, and in a very high percentage of cases, they have no idea about the legitimacy of the agency,” said Katz, an attorney with Bacon Wilson, P.C. who specializes in business and insolvency law and co-chairs the firm’s bankruptcy department.
“Most people who come to see me who have been in one of these programs found them to be unsuccessful and basically worthless,” he continued, explaining that many of them charged membership fees in the hundreds of dollars, followed by a monthly maintenance fee. This monthly payment typically goes into a ‘dedicated account’ which builds…
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Attorney, Michael B. Katz is quoted within this article.
by: Joseph Bednar
March 14, 2011