Everyone feels the pressure when debt starts to rack up all around them. With bills filling the mailbox, a bank account constantly threatening overdraft, and the looming guillotine that sits ready to drop upon your wallet, it’s hard not to think about any way possible to get out of all that crushing debt. There are multiple ways to try to get out: repayment plans, debt consolidation, and debt management programs. However, some private, for-profit companies offer debt settlement.
Debt settlement differs from consolidation and management as it is a way for a company to negotiate with your lenders and creditors to pay off a debt for less than what you owe. This is usually done through a lump sum payment that is saved up through an account, usually through the company, and it is used to pay off all your creditors. But be aware of the risks involved with debt settlement.
For one, the company will still charge you money for services and fees to get your debt lowered, and with all the included costs, it might not even be worth it as you might end up paying the same amount, just split between this private company and the creditors. Another involved risk is that you may end up lowering your credit score as most debt settlement and relief companies will tell you to stop making payments towards your debts. This means that you’ll start to accrue late payments with these lines of credit which end up hurting your credit score and history and can drop your credit score up to 90 points. A lower credit score will be detrimental to you in the long run. Not only that, but this process of debt relief can also take years to complete.
Here are some things to consider when you talk to a debt settlement company:
Debt settlement is a risky prospect as the company has no guarantee of successfully getting your lenders and creditors to lower the debt you may owe. If the company fails to get a lower amount, you may still end up owing the company for fees and services, and you’ll be left in a bigger hole than you were in before. Most financial companies that offer debt relief, credit repair, and such cannot legally offer any guarantees when it comes to your money, debt, or credit score.
Creditors may even sell off your debt to collectors during the whole process and you may end up getting calls from debt collectors and agencies. It can get even worse when a creditor or collection agency starts litigation processes to start a suit against you. You may get sued by these creditors for repayment and that will cause more problems.
In the end, debt settlement companies are a big risk. If you are considering a debt settlement company, it’s important to research their abilities and what other people think of the company to make sure the company can help you. Keep an eye out for the following red flags:
Remember to consider a debt settlement company as a last resort and try to go through other avenues and options to help pay off your debts. Most furnishers and creditors will easily negotiate with you, the customer, for a way to settle your debts, so there may be no need to use a third-party company.
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The true sign of a business is one that could take your money, but instead tells you the truth that they can't help. I spoke with Sandra on behalf of a friend that had some credit issues and she determined that based on his report, she couldn't help him at this time. This company is wonderful and I would recommend to all friends and family having credit issues.
Thanks again Sandra for your honesty.
I've known Sandra for at least 10 years. She is a phenomenal person to work with and a super hard worker that cares about people. Do not hesitate to work with her and her amazing team. Jeff is wonderful as well!!
Thank you, team Fix Your Credit Consulting you are amazing*****
Sandra is the best she is patient kind knowledgeable and undertaking and provides a judgement free zone no matter how many times you find yourself calling her because life kicked your butt again .
Jeff is also great and super helpful and always is super on top of everything he does and every phone call . I owe them for helping get my life back
When thinking about what I was grateful for over the past year one interesting thing came up as a standout.
Perhaps credit services are not the typical thing to be thankful for at this time of year, and perhaps not for all standard reasons you might expect to hear in a gratitude tribute, but it goes like this...
Sandra is not just experienced and knowledgeable, but also calming in her manner. She was not judgmental and through mutual sharing made me realize things can happen to anyone and not to feel ashamed for inquiring about the subject of credit and all of the 'fun' things that can go along with it etc.
One of the most important things I am grateful for is how she was able to lower my stress level by not only being kind, but also by being respectful and truly understanding.
I am so glad I reached out to get a fresh perspective and get my queries answered on the way to fixing any related issues that need fixing.
Thank you so much again.
