Avoid Psychological Damage From Collections By Filing for Atlanta Bankruptcy

The Wall Street Journal recently reported that there are ways to avoid the psychological damage done when collection agencies continue to badger people to collect debt.

Our Atlanta bankruptcy lawyers would argue that one way to avoid the headaches of collection agencies and their representatives is to avoid them altogether.
Filing for bankruptcy in Atlanta immediately stops collection agencies from bothering you. Once you file, they are alerted to cease communications with you and direct their communications with the court.

The whole purpose of filing for bankruptcy is to eliminate debt. But there are other benefits that can make filing worthwhile. Stopping wage garnishments, ending the countless calls and e-mails and other bothersome alerts can make life much easier for those who are in debt.

Banks and other lenders are ruthless when it comes to collecting what is owed. They don't care what damage they are doing. The collections agencies are paid to get money and the lenders want to be paid. It's a bad cycle that doesn't end until you pay up or you file for bankruptcy.

These companies rarely want to listen to debt management solutions, payment plans or cutting back on how much you owe them. Like the banks and foreclosures, the credit card companies and other lenders are interested in maximizing profits and it doesn't help when they could stand to lose money.

A recent Wall Street Journal article looks at alternative strategies to limiting the damage done by collection agencies. It follows the story of a New York man, a struggling musician, who would get 40 to 50 automated calls a day.

His solution was to by a caller ID box with a ring controller. It gave him peace while he negotiated a 69 percent reduction in the $54,000 in credit card debt he owed. The story was on the heels of the continued decline in consumer credit, which has gone down nearly every month since September 2008.

While this man was able to cut down debt after he stopped paying and instead of paying 50 cents on the dollar, he got them down to 31 cents on the dollar. But many others aren't so diligent. A lot of people get warn down by continued calls and the harassment that debt collectors are known for bringing.

People sometimes decide just to make a minimum payment just to shut them up. This just leads to a higher amount of debt, higher interest rates and hidden fees that further cripple the person's finances.

Some people instead go running to debt relief companies or debt management companies that promise to work on their behalf. But these companies are no more likely to make a dent in the debt than the consumer and they don't work for free. These companies would charge up-front fees of 15 to 20 percent of what is left outstanding, which could be a huge amount of money to pay for little help. They were recently banned from charging up-front fees.

All these rip-offs won't help. But there's a good chance that filing for bankruptcy in Atlanta will. Depending on the consumer's income level, how much they owe and other information, they can get all or most of the debt cleared without having to pay it back. These laws are designed to help the consumer who has gotten in a bad debt situation.

If you need to speak to an Atlanta bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis.

More Blog Entries:

Debt Settlement May Be Ideal, But Difficult While Atlanta Bankruptcy Works: November 21, 2011

Additional Resources:

Limiting Psychological Damage From Collections, by Michael Casey, The Wall Street Journal

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