Debt settlement is the real Wild West–lots of bad guys and no sheriff in sight. Even the companies that aren’t outright scams might charge you thousands of dollars and not resolve your debt problems.
Federal regulation may be on its way, but until then (and probably even afterward), it’s buyer beware.
Here are three signs that indicate you’re dealing with one of the bad guys:
- They refer to a “new law” or “federal bailout package” that allows consumers to cut their debt “legally.” There’s no such animal.
- They say or imply you can settle debt without affecting your credit. Debt settlement trashes your credit scores.
- They use “as seen on CNN” or other media outlets, but when you click on the link it simply brings you to another debt settlement advertisement.
Anyone who is considering debt settlement should first talk to an experienced bankruptcy attorney about his or her options. If you truly can’t pay your bills, you may be better off getting them erased through bankruptcy than throwing money at debt settlement.
For more, read:
Debt settlement: a costly escape
When debt settlement makes sense
Damned by debt consolidation: settlement could be a trap
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