Thomas F. Miles, Attorney and Counselor at Law
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Consumers should be wary of debt reorganization offers

California residents who are overwhelmed with debt are often eager to find a way back to financial stability. Debt reorganization offers can seem like good options toward reaching that goal. That said, there are a great many scams aimed at consumers who are looking to restructure their debt. Consumers must be aware of those scams and seek a debt relief option that will actually serve their needs, rather than make the situation worse.

Many financial experts believe that student loan debt relief scams are on the rise. Student loan debt is certainly a growing problem in our nation, and many people are trying to find a way to repay those obligations while also working to pay down other types of debt. Scammers prey upon those good intentions and make offers that seem to provide a solution to overwhelming debt.

Consumers should understand that the federal government offers a range of programs aimed at allowing consumers flexibility in repaying their student loans. These programs are free and open to anyone. There is no need to pay a fee for services that offer to defer or consolidate student loan debt. Information is available online directly from government sources. 

In many cases, California residents can benefit from a combination of student loan debt relief programs and Chapter 13 bankruptcy. Chapter 13 will allow an individual a viable option for debt reorganization and a chance to have certain debts eliminated through discharge. In conjunction with student loan programs, Chapter 13 can help individuals emerge from overwhelming debt and regain financial stability.

Source: Chicago Sun-Times, "Consumer debt still No. 1 source of complaints", Andy Grimm, March 7, 2016

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