What is a debt relief agency?
In 2005, Congress passed the BAPCPA, the Bankruptcy Abuse Prevention and Consumer Protection Act. The revision to the Bankruptcy Code required those professionals that counsel and assist people in the filing of bankruptcy be called Debt Relief Agencies. The professional actually assisting debtors is to be identified as “Debt Relief Agents.” In addition, those who come to us are required to be advised that we assist people in the filing of bankruptcy. You should be careful, however, because all attorneys who counsel individuals about bankruptcy are debt relief agents, but not all debt relief agents are attorneys. Our Attorneys are Debt Relief Agents and regularly attend continuing education and are qualified to give you advice.
A debt relief agency, sometimes called debt consolidation services, is a consumer based company that aids people in reducing and eliminating their debt. Most often this type of company is used when the participant is in or close to default of their outstanding debts. This is not to be confused with a debt consolidation loan. Debt relief agencies do not provide loans. Instead they work with the creditors that you have to reduce the amount of interest on the debt to make it easier for you to repay. A debt relief agency employs credit professionals, most often they have worked for credit card or loan companies in the past, who know how to talk to the creditors and get them to suspend the interest payments on the accounts. Most of the times the debt relief agencies can only help you, if you agree to not use the credit card or obtain any more loans until you have paid off the current amount of debt.
