Baxter & Baxter, LLP

Debt Settlement Companies: Throwing Good Money After Bad

admin — Wed, 25 Apr 2012 16:53:41 +0000

Debt settlement, debt consolidation and debt negotiation companies have proliferated into a ubiquitous fixture in radio advertisements, television commercials, and billboard ads. These companies offer to eliminate consumers’ debts by negotiating settlements for less than the full balance owing or for structured payments over time. Consumers are often attracted to these offers out of a desire to avoid bankruptcy. However, the problem is that these companies often take the last bit of a consumer’s money before the consumer is forced to file bankruptcy anyway. By then, their credit has been damaged worse than the bankruptcy alone would have caused.

Typically, a debt consolidation company instructs a consumer to stop paying their bills, and instead to pay the money into an account controlled by the company. This throws the consumer’s accounts into default status and starts the process of collection and charge off. This results in delinquencies appearing on the person’s credit reports, and causes collection efforts, such as collection calls and letters. The creditors may also refer the account to an outside collection agency. Once the accounts are in delinquent or default status, the debt negotiation company may get involved, by trying to negotiate a payment plan, or a reduced settlement. The problem is that this is a house of cards, and one that creditors have gotten wise to.

For example, a consumer may have five credit cards. The debt settlement company may negotiate very favorable settlements with the first four creditors, but once the fifth credit knows that a debt consolidation company is involved, the last creditor can wait until the lion’s share of the consumer’s debt is settled. Then, the last creditor can sweep in and demand full payment, or just refuse to strike a deal. That last creditor can get all of the remaining money, or may not be willing to settle at all. Now that the consumer’s debt is reduced with the other four companies, that the final creditor has no incentive to take less than the full amount owed. This is all the more acute if all five of the creditors are staring one another down. The result is that the consumer may end up with delinquencies, charge offs, and collections on their credit report, and still have to file for bankruptcy.

It is true that bankruptcy will have a significant negative impact upon one’s credit rating. However, it is a one-time event that effectively draws a “line in the sand” and allows the debtor to hit the reset button. Once all of the dischargeable debts are eliminated, the consumer can start rebuilding his or her good credit. Instead of paying money to a debt settlement company, the consumer can go back to paying priority bills, like mortgage payments and car loans. After about two years, the effect of the bankruptcy will be greatly diminished, and consumers will be able to obtain conventional credit again. A good measure of whether bankruptcy is a good options is to consider whether the debtor will reasonably expect to pay off all of the debts which would be dischargeable in bankruptcy within two years. If the answer is yes, then bankruptcy may be avoided. However, if the debtor is resting their hopes on the debt consolidation company’s house of cards, bankruptcy may be a much better option.

Bret Knewtson

admin — Fri, 20 Apr 2012 18:31:31 +0000

Today I am writing about my friend and colleague, Bret Knewtson. Bret is an outstanding attorney and member of the legal community. I will never forget the speech he gave as the outgoing Chair of the Oregon State Bar Consumer Law Section. In that speech, he talked about how lawyers have a great duty to be members of the legal community and serve.

Much of Bret’s website deals with bankruptcy, but he is also known in Oregon as the leading authority on defending against credit card lawsuits. He has led the charge in aggressively defending consumers against time-barred breach of contract lawsuits which are filed outside of the statute of limitations.

From his website “Bret Knewtson is a 2003 graduate of Lewis and Clark Law School. He has specialized in personal and small business bankruptcy protection for three years. Mr. Knewtson is always available to answer his clients’ chapter 7 and chapter 13 bankruptcy questions.
As a member of the Consumer Law Section, Mr. Knewtson has helped to pass legislation increasing Oregon’s exemption amounts for debtors and other consumer protection laws.”

You can contact Bret at:

Law Office of Bret Knewtson
3000 NW Stucki PL STE 230
Hillsboro OR 97124
503.846.1160
knewtsonlaw.com

Baxter & Baxter, LLP Social Media

admin — Fri, 20 Apr 2012 18:20:08 +0000

Find Baxter & Baxter, LLP on your favorite social media websites by clicking the links below.

Welcome to our Mini-Site!

admin — Wed, 20 Jul 2011 06:49:48 +0000

Welcome to our mini-website for Portland, Oregon bankruptcy. The attorneys of Baxter & Baxter, LLP, are dedicated advocates for consumers. Baxter & Baxter, LLP, is a Pacific Northwest consumer protection law firm with offices in Oregon and Washington. To visit our firm’s main website, visit www.baxterlaw.com.

The Oregon consumer protection lawyers of the Consumer Litigation Group represent individuals in cases with false credit reports, identity theft cases, unlawful debt collection cases, and consumer fraud cases. The Portland Oregon bankruptcy attorneys, Oregon City bankruptcy attorneys, Hillsboro, Oregon bankruptcy attorneys, and Vancouver Washington bankruptcy lawyers of the Bankruptcy Practice Group represent individuals in Chapter 7 and Chapter 13 bankruptcy. Our mission of committed and zealous consumer advocacy is unrivaled, and our track record of excellence and professionalism is recognized nationwide.

For more information about bankruptcy in Oregon and Washington, click the links below:

“We are a debt relief agency. We help people file for relief under the Bankruptcy Code.”

New Bankruptcy Statistics From Vancouver WA Bankruptcy Court

admin — Sun, 03 Jul 2011 01:32:06 +0000

The United States Bankruptcy Court for the Western District of Oregon has just released new bankruptcy statistics for January through May of 2010. Consistent with filing patterns in other parts of the country, the high numbers of individuals filing for Chapter 7 and Chapter 13 bankruptcy remains stable.

With the exception of May 2010, the monthly filings for Vancouver WA bankruptcy petitions has increased for each month from 2009. Clark County bankruptcy filings increased 15% for February 2010, 20% in March 2010, and 9% in April 2010. In May 2010, there was a slight drop in bankruptcy filings in Clark County, but this decrease was offset by a 20% increase in Cowlitz County bankruptcies, and increases for Pacific, Skamania and Wahkiakum Counties. Although the percentages for those counties are high, the real numbers of those lower populated counties is still a small percentage of the total filings in this district.

The gross number of filings has remained relatively stable from 2009 to 2010, however, 2008 and 2009 showed significant increases in bankruptcy filings over previous years. Accordingly, the trend remains high. The yearly filings for the Western District of Washington were as follows: 2000: 17665, 2001: 21850, 2002: 23397, 2003: 24398, 2004: 23402, 2005: 30165, 2006: 5791, 2007:7665, 2008:11439, 2009:18523. Chapter 13 bankruptcy filings also followed a similar trend, as follows: 2000: 4922, 2001: 4979, 2002: 5299, 2003: 5533, 2004: 5450, 2005: 5085, 2006: 2581, 2007: 3489, 2008: 4708, 2009: 5501. The statistics do not take into account cases that are dismissed or converted after filing.

It appears that there was a statistical blip in 2004, when the BAPCPA took effect and as filers believed that they would be precluded from filing in the future. However, as the housing bubble allowed consumers to borrow their way out of debt, filings in 2006 and 2007 fell precipitously. The financial crash and ensuing crisis caused those figures to rise exponentially through the current quarter. It leaves to be seen whether the trend will continue to rise, remain stable, or eventually correct itself.