Debt Stoppers review: read this before filing for bankruptcy
The idea of filing for bankruptcy is tough to swallow. We like to think it happens to “someone else” but “not me.”
Unfortunately, it’s all too common.
Whether you know it or not, you likely have friends, neighbors, coworkers, and family members who have declared bankruptcy. Heck, even a U.S. president filed half a dozen times.
For all the stigma, bankruptcy is nothing to be ashamed of. In many cases, it can be the smartest—and potentially only—course of action to get out of debt.
The problem: most people know too little about how this process works. So, they often turn to specialists like the bankruptcy law firm Debt Stoppers. But are such firms legit?
How do they help, and who should use their services?
Read on to learn more about Debt Stoppers, how they can assist you through bankruptcy proceedings, and how much that will cost.
(Spoiler alert: Debt Stoppers has recently filed for bankruptcy itself. More on that later.)
What does Debt Stoppers do?
Debt Stoppers is one of America’s largest bankruptcy law firms, with offices in Illinois, Georgia, and Texas.
They assist clients who have found themselves drowning in debt and unable to cover monthly payments. Typically that’s overdue credit cards, unpaid medical bills, or other lapsed loans.
If Debt Stoppers determines bankruptcy is your best option, they will guide you through the complex Chapter 7 or Chapter 13 filing process.
The company also offers credit counseling designed to help you rebuild your financial profile after declaring bankruptcy. It includes an educational component around managing personal finances and reducing debt.
What’s the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 bankruptcy is sometimes referred to as “liquidation bankruptcy.” It involves selling a debtor’s assets to raise money to pay off creditors.
Although businesses can file for Chapter 7, it’s typically used by individuals with substantial unsecured debts and no obvious way to repay.
Chapter 7 doesn’t include a repayment plan. Once all non-exempt assets have been sold and the debts discharged (i.e., forgiven or eliminated), the debtor is no longer responsible for the debt.
Chapter 13 bankruptcy is typically referred to as a “reorganization bankruptcy.” It permits debtors to repay debts using an approved plan, usually lasting three to five years.
To qualify for Chapter 13, you must have a regular source of income. This ensures you can make regular payments to a court-appointed trustee as part of the approved plan.
Like Chapter 7, it’s used mainly by individuals. Unlike Chapter 7, debtors keep possession of their assets. Any remaining dischargeable debt is typically forgiven once the repayment plan concludes.
How much does Debt Stoppers cost?
- Initial case assessment: free ($0)
- Chapter 7: $335 filling fee (advanced, $0 upfront) + attorney fees
- Chapter 13: $310 filling fee + attorneys fees
Attorneys’ fees vary depending on the case. Debt Stoppers doesn’t list their hourly rates, but last year the average attorney in the United States charged $313 per (according to Clio’s 2022 Legal Trends Report).
In other words, lawyers are expensive.
Is Debt Stoppers legit?
Yes, Debt Stoppers is a legitimate company with nearly two decades in operation. Even so, it has two red flags you should be aware of:
- Debt Stoppers is not accredited by the Better Business Bureau (BBB).
- Even though they remain active and in business, the company filer for bankruptcy in April 2023.
What are clients saying?
Debt Stoppers has mixed reviews. Although it enjoys substantial positive feedback, it also has a fair share of negative client comments.
|Number of Review
|4.2 out of 5
|2.1 out of 5
|2.4 out of 5
|4.0 out of 5
|1.0 out of 5
The top comments largely speak of “compassionate” and “caring” representatives that treat clients like “humans.” This bodes well for a company dealing with a sensitive subject like bankruptcy. At the other end, however, reviewers complained the law firm is unresponsive and “unreliable.”
So, while they may be polite when you speak to them, you could have trouble reaching them in the first place.
Can Debt Stoppers help you?
Bankruptcy can have a significant impact on your finances and credit rating. Typically, it’s considered a last resort when solving financial challenges. Nevertheless, you might benefit from a service like Debt Stoppers if:
- You cannot meet monthly financial obligations, like bill and loan payments.
- You’re facing repossession, wage garnishment, or foreclosure.
- You’re already considering bankruptcy and require assistance with the filing process.
If you’ve been unsuccessful in resolving overwhelming debt obligations, consider speaking with a representative at Debt Stoppers. They’ll assess your situation and recommend whether Chapter 7 or Chapter 13 is a suitable option.
Remember, bankruptcy shouldn’t be taken lightly. Carefully weigh all your options before committing to a program with Debt Stoppers.
Debt Stoppers pros and cons
|Reduce stress: Debt challenges can be anxiety-inducing. Having experts hold your hand throughout a resolution can offer peace of mind.
|Not all debts covered: Certain debts like child support and tax debts cannot be discharged under bankruptcy.
|Stop collection: They’ll handle any communication with debt collectors.
|Credit impact: While it can eventually be rebuilt, bankruptcy can initially severely harm your credit rating.
|Legal expertise: Filing can be complex. Debt Stoppers employs a large team of lawyers to help you navigate the process.
|Cost: Attorney fees—which vary case-by-case—can be substantial.
|Eliminate debt: A portion or all of your debts will be cleared if the bankruptcy filing with Debt Stoppers is successful.
|Limited control: Leveraging their services will mean you’ll have less personal control over the proceedings.
Is Debt Stoppers still active?
Yes, Debt Stoppers remains active, although ironically they filed for bankruptcy in April 2023 following a downturn in bankruptcy filings resulting from the Covid-19 pandemic.
In 2022, filing totaled 387,721 in the United States, a drop from the 413,616 witnessed the year prior.
Managing partner Patrick Semrad, however, claims the bankruptcy filing has placed Debt Stoppers “in a better position to move forward.”
That may be true, but it’s imperative that as a consumer you monitor Debt Stoppers’ status as its bankruptcy restructuring unfolds.