Debt Settlement Scams
Scams and frauds have become a very common problem in recent times. They are growing at an alarming pace and have become a threat to the financial sector. In case you are planning to go for debt settlement or debt consolidation, it is highly advisable that you do thorough research as to which company to hire. There are several firms that help you settling your debts but in some cases, these companies turn out to be frauds. Therefore, it is crucial that you make an educated decision to ensure that the company you choose provides you with ethical services. Many companies advertise themselves claiming to be non-profit; but do not get mislead by that tag, as it can be deceiving.
Lets be clear and face facts- some who offer debt settlement are scam artists. The same can be said of all companies in all industries. Recently the owner of an major SEC-approved investment firm was found guilty of swindling $50 BILLION from investors for example, the biggest scam in American history. Even priests, teachers, and politicians have been arrested recently in America.
Basically, debt settlement also bears the term debt negotiation. This is the process of working with creditors as to assist in the act of reducing the total amount of what you owe. These creditors are willing to work with these companies since they are aware of the fact that there is a big tendency that they will not get anything especially when the debtor had already filed for bankruptcy. However, it is best to gear yourself with the fact that not all creditors are willing to bargain with your debts.
Benefits of settling your debt in this way are several. The biggest benefit is that you avoid bankruptcy. Next, you can stop collection calls, which can come very close to the point of harassment. You will only have to make a single payment every month, which will be smaller and much easier to keep up with than the multiple payments you have been making.
Signs of a Bad Settlement
The debt settler’s job is to eliminate as much of the debt owed as possible. If the company fails to reduce the debt by at least 35%, then they have not put forth enough effort or should not have accepted the client’s case at all. They should also make sure that the creditor doesn’t attach excessive fees to balance their losses. More recent debts are more difficult to reduce because the creditors believe there is a greater chance of collecting the full amount, and with proper consultation, the client would have received advice on seeking other types of debt relief.
If a debt negotiation company explains that they’ll personally fix your credit score and guarantee you creditors won’t sue you while you’re in the program, don’t trust your business to them. Why? Simple: they’re lying. No matter how much a debt settlement company wants to help you get out of debt, they can’t fix your credit score. Your credit score will, in the short run, be hurt. Also, although it doesn’t usually happen, creditors always have the right to take you to court. That’s why reliable debt settlement companies keep their programs short: so you’ll get out of debt quicker and there’ll be less chances of your creditors suing you.
Like I said I have been in this business for almost 10 years now and currently I work for an outstanding company with a great track record and an amazing record with the BBB, the FSLC. If you want an honest evaluation of your situation to see if this is the right method of consumer debt relief for you than follow the link below in the signature file and fill out an application. I will go over in great detail how this process works and whether you are a good candidate. I hope after reading this article you feel more educated as to how this process works and what to look out for when you are interviewing companies to potentially help you out.
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