Explanation

Consumer Debt Resolution is generally the last resort before filing Bankruptcy. It involves debt from credit cards, medical bills, or other debts that do not involve collateral. Some debt relief services programs are offered through law firms and others are not.  It is generally in our view better to participate in a law firm program rather than a non-law firm program. Some creditors will not work with anyone other than lawyer. Similarly, some programs charge on a contingent basis while others operate with periodic fee payments. Based upon our review of the market, the cost of the contingent programs are generally more money and they also create incentives for providers to focus on some debts and not others. We only refer legal model programs and pay as you go models since we believe for the average consumer the cost will be less and service better than under the alternatives. 

An alternative to debt relief services is credit counseling offered through non-profit companies and debt management programs offered through for profit companies. While there is less risk in these alternatives, the cost to the consumer can be double the cost of a debt relief services program.  Note, the form of credit counseling described in the preceding sentence is different from the pre-petition credit counseling required in Chapter 7 bankruptcy. The requirements to participate in a credit counseling program or debt management program are much stricter and the failure rates much higher. For example, only credit card debt can be enrolled, all of the credit card creditors have to agree, and the monthly costs are much higher. Although there is a risk of legal action with debt relief services that does not exist in credit counseling or debt management programs, in light of the stricter requirements, the increased costs and the higher failure rates, we recommend debt relief services and not credit counseling or debt management.

Bankruptcy should be the option of last resort. We recommend trying Consumer Debt Resolution and Consumer Loan Modification before Bankruptcy. If you enroll in a Consumer Debt Resolution program and do not succeed, you can always file for Bankruptcy later on. To the extent you paid any fees in debt relief services, they generally would not be recoverable and would generally end up being claimed by your creditors and the trustee even if you had not enrolled in a debt relief services program. If you own a home, by filing for Bankruptcy you are at a risk of losing your home while Consumer Loan Modification if successful will save your home. 

Fees for Consumer Debt Resolution can be collected on a performance basis only after a particular debt has essentially been resolved, or in another format. If fees are collected on a performance basis, the costs tend to be higher because the provider is at risk of not getting paid. The provider in a performance program is incentivized to handle the small debts and the easiest first since they will get paid sooner. If fees are not collected on a performance basis, the consumer must receive an in-person presentation before signing any documents or making any payments. Even in a performance model, a vendor can still collect banking and software fees even if no debt is resolved. Even though it is viewed by some that performance programs are better because there are no fees unless there is success, RBI Limited Liability Company believes other payment formats are better. The cost is less and the vendor is incentivized to deal with the critical debts first rather than the easiest and fastest debts to resolve. Similarly, in a performance model, there can be a tendency to push consumers into bad settlements so that a vendor can get paid.

If you are interested in being connected to a Consumer Debt Resolution law firm provider, please complete the information below.

The description above is in general terms and may not apply to your particular situation.

CONNECTION TO A LAW FIRM OFFERING CONSUMER DEBT RESOLUTION SERVICES 

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Kindly fill in the information below. If you do not know the answer to a question fill in do not know at this time. You will likely have to provide the information later on. If the question does not apply to you, write N/A. Should critical information be missing, a provider will require it before they will contract with you.