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Beware of Debt Settlement Companies Who Want Your Money!!!!
We have all seen the ads on TV. They come on late at night and in the middle of the day, companies promising to 'reduce your debt' and 'stop harassing phone calls'. Some of them use advertising implying that they are somehow affiliated with president Obama or the federal government. Consumer, beware! Most of these companies are frauds and tricksters. They lure you in with promises of settling your credit card debt 'for pennies on the dollar' but really just want to get you locked into a service agreement or contract that could cause you to wind up with worse than just bad credit! Millions of consumers have fallen into the debt management and credit repair trap. In fact, over 10 million consumers nationwide are enrolled with these so-called consumer service companies. In fact, so many consumers have been scammed by these companies that the Federal Trade Commission has felt it necessary to devote entire sections of it's website to advice for consumers regarding these services. Check out this excerpt from the FTC's website: "The Truth There is no guarantee that the services debt settlement companies offer are legitimate. There also is no guarantee that a creditor will accept partial payment of a legitimate debt. In fact, if you stop making payments on a credit card, late fees and interest usually are added to the debt each month. If you exceed your credit limit, additional fees and charges also can be added. This can cause your original debt to double or triple. All these fees will put you further in the hole. While creditors have no obligation to agree to negotiate the amount a consumer owes, they have a legal obligation to provide accurate information to the credit reporting agencies, including your failure to make monthly payments. That can result in a negative entry on your credit report. And in certain situations, creditors may have the right to sue you to recover the money you owe. In some instances, when creditors win a lawsuit, they have the right to garnish your wages or put a lien on your home. Finally, the Internal Revenue Service may consider any amount of forgiven debt to be taxable income."Source: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm Before you sign anything for a debt settlement company, please take the time to do your homework. Many of these companies employ slick talking call center employees to convince you to stop paying your creditors and pay them instead. They employ a strategy that consists of you entering into a 3-5 year program that forces you to pay them before they ever send a dime to your creditors. By the time they actually get around to making an attempt to settle your debt, the creditors have already damaged your credit rating and may even be suing you for your outstanding debt. In the event that you are sued by a creditor, the debt settlement company is not going to provide you with any legal representation or advice and will most likely tell you that you are on your own at that point. Here is another excerpt from the FTC's wesite: Tip-offs to Rip-offs Steer clear of debt relief companies that: charge any fees before it settles your debts guarantee they can remove your unsecured debt tout a "new government program" to bail out personal credit card debt promise that unsecured debts can be paid off with pennies on the dollar tell you to stop making payments to or communicating with your creditors tell you it can stop all debt collection calls and lawsuits claim that creditors never sue consumers for non-payment of unsecured debt promise that using their system will have no negative impact on your credit report claim that they can remove accurate negative information from your credit report. If you decide to work with a debt settlement company, be sure to check it out with your state Attorney General, local consumer protection agency, and the Better Business Bureau. They can tell you if any consumer complaints are on file about the firm you're considering doing business with. Also, ask your state Attorney General if the company is required to be licensed to work in your state and, if so, whether it is. Source: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre26.shtm The FTC has many other resources for consumers who are in trouble with their finances. As well, try your own state's consumer protection agency for additional help. Don't be fooled into making your situation worse than it already is! Be careful and remember: There is no new way to get out of debt! The only way to get creditors off your back and restore your credit rating is to pay your accounts off. The creditors are willing to settle with you if you have the means to do so. For an individual debt evaluation and consultation, call VEASLEY CONSULTING LLC @ 678-993-6970 today! ...read more
By Veasley Consulting LLC August 11, 2012
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