Why File Bankruptcy; I Can Settle My Debts

Yes, I know, I keep showing these rats.  But they keep trying to take your money!

These two are debt settlement company employees; you know, the companies you hear about on the radio all the time:  Don’t file bankruptcy!  We can settle your debt for pennies on the dollar!  The secret the credit card companies don’t want you to know!  New Federal laws blah, blah, blah, yada, yada, yada.

I have written about debt settlement companies before, but, they are still out there victimizing people.

“The so-called ‘debt settlement’ industry is now the single greatest fraud of the year,” says Department of Consumer Affairs Commissioner Jonathan Mintz.  (from debt settlement company article by Asa Aarona on NY1 website)

In spite of bank and credit card company and mortgage industry propaganda, the vast majority of people want to pay their debts.  They feel terrible about coming to see a bankruptcy lawyer.

I tell them, no one wants to file.  No one picks up that diploma and says:  “My dream is to be broke and in a bankruptcy attorney’s office in X years.”

Debt settlement company hustlers prey on that, pump up the guilt, steer you away from evil bankruptcy lawyers, and tell you what is too good to be true:  you can pay a few dollars, and your humungous debt will go away, and you will still have a credit rating, and the creditors will be off your back.

Now, what really happens:  you pay them fees up front.  Then you pay them a certain amount every month.  The debt settlement company does not even talk to your creditors until you have a certain lump sum build up in that account.  And they keep taking their fees every month.

Meanwhile, your creditors are free to harass, even sue, you.  To get a judgment, garnish your wages, in states like Michigan that allow wage garnishments, and execute that judgment against your property.

Debt settlement companies are almost always scams.

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