• Skip to main content
  • Skip to primary sidebar

Ask Liz Weston

Get smart with your money

  • About
  • Liz’s Books
  • Speaking
  • Disclosure
  • Contact

Debt settlement a bad alternative to bankruptcy

August 28, 2017 By Liz Weston

Debt settlement isn’t the Wild West industry it was a decade ago, when people routinely paid hefty upfront fees to companies that failed to deliver any relief.

Thanks to increased regulation and enforcement, the much smaller number of settlement companies that remain often do what they promise: persuade at least some of a borrower’s creditors to forgive part of the debt, typically in exchange for a lump sum payment.

Several people I’ve interviewed lately reported positive experiences with debt settlement, so I decided to take another look at the industry. It turns out that hiring a negotiator could be a reasonable alternative to bankruptcy for some. But debt settlement is not as consumer-friendly as the industry presents it, and some of the people who praised the companies didn’t fully understand their alternatives or the longer-term consequences of settling debt.

In my latest for the Associated Press, a look at the biggest problems with debt settlement.

Related Posts

  • Q&A: Debt settlement vs. filing for bankruptcy: Pros and cons

    Dear Liz: I owe a credit card company about $16,900. I have not been able…

  • When Bankruptcy Is the Best Option

    Bankruptcy isn’t the end of the world. It may even be good for you. Bankruptcy…

  • Q&A: The hazards of debt settlement

    Dear Liz: My wife and I owe about $46,000 in credit card debt. We are…

  • Q&A: Bankruptcy and credit reports

    Dear Liz: In February 2015, it will be seven years since my bankruptcy. I have…

Filed Under: Liz's Blog Tagged With: Bankruptcy, debt, debt settlement

Primary Sidebar

Search

Copyright © 2025 · Ask Liz Weston 2.0 On Genesis Framework · WordPress · Log in