There are many commercials from debt settlement companies that promise to settle debts for pennies on the dollar or for low monthly payments. You should be skeptical about these claims. These ads and the national debt settlement companies are harmful to consumers.
In some cases, it makes sense to settle your debt. A debt settlement attorney or bankruptcy attorney only provide debt settlement services after a thorough analysis of your financial situation and assessment of other options.
Never enter into a debt settlement program without consulting an experienced bankruptcy attorney.
The national debt settlement companies simply do not deliver results. According to a recent survey by the National Consumer Law Center, only 1.4% of the people entering debt settlement program successfully complete their program and a large number of the companies are routinely under investigation for fraudulent business practices. The big reason for this high failure rate? They sell their programs to people who should have filed a chapter 7 bankruptcy at a fraction of the cost.
National Debt settlement companies are expensive
Up to 25% of every month's payment goes to a "management" fee. They are doing nothing but collecting money and letting it accumulate. So if you settle $30,000 in debt for $20,000, it would have cost you $5,000 in fees. A law firm does not come close to charging such outrageous fees.
Most people should not enter into a debt settlement program because most people who are unable to pay their debts will qualify for a chapter 7 bankruptcy. Keeping that basic rule of thumb in mind, good settlement candidates typically have the following profile.
- A relatively small number of creditors.
- Reasonable debt load given assets and income
- Significant assets that would not be protected under bankruptcy
welcome to Insurances.net (https://www.insurances.net)
