Tips To Not Get Caught In The Debt Settlement Trap
Wednesday, April 22, 2015, 6:00 AM | Leave Comment
A time comes in almost everyone’s financial life who are in debt that it gets harder and harder to pay loan payments. If you are one of them, you surely are not alone. Many folks are struggling with their finances.
You must have seen ads in different media about debt settlement services. You may be tempted by these ads from companies offering to settle your debts for 50 cents on the dollar, but beware, it could be a trap that will leave you further in debt.
Watch out for the debt settlement companies and stay away from them if they meet the following conditions:
-
Debt settlement companies charge upfront fee
Most debt settlement companies charge regardless of whether they ever settle your debts. Stay away.
-
Debt settlement services don’t provide instant relief
While you are trying to save specific amount of money in a bank account each month as the debt settlement company’s fees, it will be continually deducted from your bank account each month.
If you have multiple debts, you will save for them one-at-a-time, so the whole process could take several years.
-
Debt settlement services can be very expensive
Many of these companies are quite expensive. It kills the whole purpose of reducing debt. You might in stead add up to your debt more.
-
Claims for success rates can be very misleading
Debt settlement companies advertise big savings but those claims often don’t take into consideration the number of accounts that are never settled or the fees that customers pay.
-
Debt settlement programs don’t stop debt collection
You must keep this in mind. Banks and debt collectors don’t have to cooperate with debt settlement companies and they can keep trying to collect the money you owe.
While you are saving for a settlement, your debt may increase because of interest and penalties, you may be hounded by collection agents, and you can be sued for the debt.
In a Nutshell
Be very careful when you hire a debt settlement company. Search for reviews. Never give any company upfront fee. This industry is full of scams and are littered with crooks.
