The Verdict on Debt Settlement Companies


Our economy is challenged…this may be an understatement but you get the drift.  I have people contact me seeking “debt settlement services” and I also have people contact me who have had bad experience with debt settlement companies.

As to my impression of debt settlement companies, I will say this:  I do not fully understand how they propose to help and actually help consumers but I have heard a significant number of stories of “I paid money to a debt settlement company and my bills debts went unpaid even longer.”  And in a few of these situations the consumer reported to me that they were sued on at least some of the debts that they provided to the debt settlement company.  Just reporting my information and experience on this topic; as limited as it is.  For more info in debt settlement companies visit the Federal Trade Commission webpage.

If you find yourself in a position where you want or need some help in figuring out how to resolve your overall debt/financial picture you should probably consult an experienced bankruptcy attorney.  I do not handle bankruptcy cases but for those of you in the Charlotte area and Western North Carolina contact my colleague Rashad Blossom.  For those of you in the Greensboro and Triad area contact my colleagues Ken Johnson, Kenneth Love, and Aleta Kiser.  And for those of you in the Raleigh area and Eastern North Carolina contact Robert Lewis.

If you intend to contact a debt settlement company be diligent. Read reviews about the company and check the Better Business Bureau and Attorney Generals Office for information. Before you agree to employ the company read the proposed Agreement or contract very closely so you will understand what services are to be provided and at what cost. After you employ the company and the debt is “being handled” you should request periodic updates—preferably in writing—as to the status of your “account” and it may not hurt to check your credit report to ensure that the debt settlement company is following through on promises especially regarding payments on your debts.

Whatever you do make sure you get competent help and all significant promises in writing.  Best of success to you.

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3 Comments

  1. Susan M.

    We are using a licensed credit counseling service recommended by HUD and the state to help clear all our debts. So far it has been working very well. They negotiated reduced or in some cases eliminated interest rates for us and lower payments. We pay them a lump sum each month and they pay our creditors directly. So far we’ve paid off 3 in total and are close on 2 more. I’m very happy with their service so far. Their fee is $35 a month which I feel is reasonable for what they do. I get a monthly report from them and they send me notices as well when a card is close to being paid off.

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