Aug 27, 2008 7:22 pm US/Eastern
Consumer Watch: Bankruptcy Vs. Consolidation
NEW YORK (CBS) ―
Tightening finances are a real problem for many families, so if you feel like your income is shrinking with ever-growing expenses, you are not alone.
It's hard to find someone these days not affected by rising mortgage rates, skyrocketing credit card interest payments, and a super-sized bill at the grocery store.
New mom Marie Heubach, a Lower East Side resident, says it's affecting everyone.
"Everybody's watching spending and making sure they're not spending more than they absolutely have to," she says.
It has Steven Burman the busiest he's been in more than a decade as a credit counselor.
"Ninety-five percent of the credit reports I see are already fairly damaged when they walk into our office," he says.
For about $35 a month, Burman puts the brakes on debt, coming up with a plan to pay it all off within five years by working with creditors to make debt manageable.
"Waiving late fees, waiving over limit fees and getting the interest rate back down," he says.
But clients who cannot repair often face bankruptcy.
"The typical debtor that has very high credit card debt, medical bills, loss of income incredible interest rates," says bankruptcy attorney David Shaey.
Shaev helps a client decipher which type of bankruptcy to declare. Often, he'll be able to save retirement accounts, and sometimes a person's home.
"This is a homestead state. You are allowed $50,000 homestead exemption per person on deed if you reside in the house," he says.
One basic rule to keep yourself afloat: don't have any one debt payment that's more than 28 percent of your income, and total debt should not exceed 36 percent.
For Non-Profit Credit Counseling, contact Steven Burman, Credit Advocate Counseling Corp of New York City
by clicking here. For Bankruptcy Attorney David Shaev,
click here.To find an accredited Bankruptcy Attorney:
National Association of Consumer Bankruptcy Attorneys To find a licensed, bonded, accredited, non-profit credit counselor:
ALBANY:
Department of State
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231
Phone: (518) 474-4752
NEW YORK CITY:
Department of State
123 William Street
New York, NY 10038-3804
Tel: (212) 417-5800
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