The Real Truth About Debt Settlement Companies

(image from Dr. Mark Goulston web site)

They are scams!

Almost every debt settlement company is out to take advantage of people desperate to avoid bankruptcy.

They make verbal promises that are NOT backed up in their written contracts, which always refuse to guarantee results.

They take money out of your bank account every month, but do not even talk to creditors until they have a large sum in the bank.

I have many clients taken in by these con men.

They pay every month, and get sued and garnished anyway.

Oh, and do they mention the 1099 IRS form you get for forgiveness of debt income?

Don’t get me wrong; credit card companies will settle, but, they almost always want lump sums.

The normal wording in the fine print in the debt settlement company contract is that they will not even contact the creditors until they have X amount of dollars on hand.

And, they take their fees up front.

Though, charging debt settlement fees up front was made illegal by the FTC last fall.

That does not mean it is not happening any more, as the FTC rules do not apply to in-person or internet sales.

What are they doing for you that you could not do for yourself?

Nothing!

I am not a Suzie Orman fan, but she has a video on how to settle your own debts.

Where do you find debt settlement companies?

Usually, online.

Out of state hard to chase or sue for refunds.

Oftentimes, as with the first linked story on this post, you are dealing with out of state law firms.

Who tell you all the great things they will do, but, are not licensed in your state, so cannot appear in court on our behalf.

 

The Real Truth About Debt Settlement Companies

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