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Debt Consolidation vs. Bankruptcy Top-Rated Attorneys in Los Angeles

Los Angeles Debt Consolidation Lawyer

Debt Consolidation vs. Bankruptcy

Dealing with overwhelming debt can be an overwhelming and stressful experience, impacting various aspects of your life. When facing financial challenges, exploring the right debt relief option becomes crucial. Two common approaches individuals consider are debt consolidation and bankruptcy. Understanding the differences between these options is essential in making an informed decision that aligns with your financial goals.

If you are struggling with debt and looking for a way out, it is wise to explore your options. You have probably seen or heard advertisements for debt consolidation services that promise to work with your creditors to consolidate your debt and significantly lower your monthly payments. We urge you to use caution before contacting one of these services. Like most promises that sound too good to be true, they often are.

At RHM LAW LLP, we will help you explore all of the debt relief options available to you. We are a bankruptcy firm in Los Angeles, but we do not push our clients into bankruptcy if we do not think it is the best option for them. We are committed to helping our clients resolve their debt problems, achieving true debt relief, and avoiding potential debt consolidation scams.


Call us at (213) 344-0043 today for a 30-minute risk-free consultation with a Los Angeles bankruptcy lawyer. It could be your first step on the road to debt relief.


Is Debt Consolidation Right for You?

If you hire a debt consolidation service, the best-case scenario is that they will act in good faith and attempt to work with your creditors to consolidate your debt and negotiate lower payments. The question is: How are they going to get your creditors to go along with the plan?

In many cases, debt consolidation services have no leverage and no means of providing lenders with incentive to agree to a debt consolidation. If, after months of waiting, the company is not able to help you, you will be left with all of the debt plus months of interest and/or late fees. Plus, you probably paid good money to the debt consolidation service. More often than not, the fees are more excessive for less relief than a discharge in a bankruptcy.

The above scenario is based on the assumption the consolidation service is acting in good faith. Since these companies are largely unregulated, consumers are putting themselves at risk by handing money over to them. A bankruptcy law firm is backed by the power of the federal bankruptcy code. When you file for bankruptcy, you do not have to get your creditors to agree to the plan. It is enforced by the bankruptcy court.

Bankruptcy is not right for everyone, but those who it can help are usually at a disservice by hiring a debt consolidation attorney.

Debt Consolidation: Combining Debts for Manageability

Debt consolidation involves combining multiple debts into a single, more manageable payment. This is often achieved through various methods:

  • Debt Consolidation Loans: Obtaining a new loan to pay off existing debts, consolidating multiple payments into one with a potentially lower interest rate.
  • Balance Transfer Credit Cards: Transferring balances from high-interest credit cards to a card with a lower interest rate, simplifying payments.
  • Debt Management Plans (DMPs): Working with a credit counseling agency to negotiate lower interest rates and create a structured repayment plan.

Pros of Debt Consolidation:

  • Simplified Payments: Combining debts into one monthly payment can make finances more manageable.
  • Potential Lower Interest Rates: Debt consolidation may result in lower overall interest rates, reducing the cost of repayment.

Cons of Debt Consolidation:

  • Qualification Requirements: Obtaining a favorable debt consolidation loan or credit card may require a good credit score.
  • Extended Repayment Period: While payments may be lower, the overall repayment period could be extended, increasing the total interest paid.

Bankruptcy: A Fresh Financial Start

Bankruptcy is a legal process that provides individuals with a fresh start by eliminating or restructuring debts. The two primary forms of consumer bankruptcy are Chapter 7 and Chapter 13:

  • Chapter 7 Bankruptcy: Involves the liquidation of non-exempt assets to pay off debts, with remaining qualifying debts discharged.
  • Chapter 13 Bankruptcy: Involves creating a court-approved repayment plan to repay all or a portion of debts over three to five years.

Pros of Bankruptcy:

  • Debt Discharge: Bankruptcy can result in the discharge of qualifying debts, providing a clean slate.
  • Automatic Stay: Filing for bankruptcy triggers an automatic stay, halting creditor actions, including collection efforts and foreclosure.

Cons of Bankruptcy:

  • Credit Impact: Bankruptcy has a significant negative impact on credit scores, potentially affecting future borrowing opportunities.
  • Asset Liquidation (Chapter 7): In Chapter 7, non-exempt assets may be liquidated to satisfy debts.

Why Choose Resnik Hayes Moradi LLP?

  • Expertise in Debt Consolidation: Our Los Angeles bankruptcy attorneys specialize in debt consolidation, possessing a deep understanding of the various strategies and legal options available to individuals seeking to manage and reduce their debt burden.
  • Client-Centered Approach: At Resnik Hayes Moradi LLP, we understand the stress and challenges associated with overwhelming debt. We take a client-centered approach, prioritizing open communication, empathy, and personalized attention to address the unique needs of each client.
  • Holistic Debt Relief Solutions: Beyond debt consolidation, our firm provides comprehensive debt relief solutions, including bankruptcy representation, creditor negotiations, and legal strategies to help clients achieve a sustainable financial future.

Legal Services for Debt Consolidation

  • Debt Assessment and Analysis: Our Los Angeles debt consolidation attorneys conduct a thorough analysis of your financial situation, reviewing debts, income, and expenses to develop a comprehensive understanding of your financial landscape.
  • Debt Consolidation Strategies: We explore various debt consolidation options, including debt consolidation loans, balance transfers, and debt management plans, to create a customized strategy that aligns with your goals.
  • Creditor Negotiations: Our legal team engages with creditors to negotiate favorable terms, such as reduced interest rates or lower monthly payments, to make debt repayment more manageable.
  • Bankruptcy Consultation: If debt consolidation is not the most suitable option, we provide guidance on bankruptcy options, assisting clients in making informed decisions about Chapter 7, Chapter 13, or other bankruptcy alternatives.

Your Partners in Achieving Financial Freedom

Resnik Hayes Moradi LLP is more than a legal service provider; we are your partners in achieving financial freedom. If you are struggling with overwhelming debt in Los Angeles, contact us for a confidential consultation. Let our Debt Consolidation Lawyers guide you through the process, explore viable solutions, and work towards helping you regain control of your financial future.

Take the first step towards financial relief. Contact Resnik Hayes Moradi LLP, your trusted advocates for debt consolidation and bankruptcy in Los Angeles.

Contact Our Los Angeles Debt Consolidation Attorney

Our offices are open weekdays from 7:00 a.m. to 7:00 p.m., and our attorneys serve clients in the Los Angeles area and San Fernando Valley through offices in Encino and Los Angeles.


For a 30-minute risk-free consultation about filing for bankruptcy with RHM LAW LLP, contact our firm today to speak with a debt consolidation lawyer near you.


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Committed to making the process as stress-free as possible for our clients, our Los Angeles bankruptcy attorneys and dedicated staff will handle everything for you. From filling out paperwork through getting end results, we will work to help your case run smoothly and efficiently. We serve our clients in English, Spanish and Farsi.