Choosing a Company
A Program That's Right For You
There are many things you need to be mindful of when you are choosing a debt settlement company. Many companies offering debt settlement services are small, unsophisticated and have only been around for a short period of time. The good ones will have a track record of success and will be able to provide you with an honest assessment of not only the potential benefits, but also the potential downsides of debt settlement for your situation. The fact is that debt settlement is not right for everyone. It is a program designed for consumers with serious debt problems, who are unable to maintain payment obligations and are considering bankruptcy or credit counseling.
The Federal Trade Commission (FTC) advises to stay away from any company that makes untrue claims:
Promises that unsecured debts can be paid off for pennies on the dollar. The truth is that there is no guarantee that any creditor will accept partial payment of a legitimate debt. Your best bet is to contact your creditor directly as soon as you are having problems making payments.
Requires substantial monthly service fees and demands payment upfront. The truth is that reputable companies will not charge fees upfront. Fees will only be due if and when a debt has been resolved.
Tells you to that it is OK to stop making payments altogether. The truth is that if you stop making payments on a credit card, expect late fees and interest to be added to the amount you owe each month. If you exceed your credit limit, expect additional fees and charges to be added. Your credit score will also be negatively impacted.
Claims that creditors do not sue people for not paying their unsecured debts. The truth is that creditors may have the right to sue to recover the money that is owed to them. In some cases, if a creditor wins a lawsuit, they may have the right to garnish your wages or put a lien on your home.
Claims that they can remove accurate, negative information from your credit report. The truth is that no company can remove negative information from your credit report that is accurate and timely. It’s illegal.
Read More at www.ftc.gov