Fugetaboutit: Debt Settlement Agencies and Their Fake Offers

If you are not already sick of hearing debt settlement advertisements on the television or radio, you might actually be listening to get more information because you actually need debt help. However, the ads that have been plastered around the country making claims to settle your debts for next to nothing are not only annoying but many are untrue.

Debt settlement is a serious business for the debtor but a big money maker for the agencies promoting these services. Here is what you should know about those ad campaign promises before signing up for services:

Promise #1 ‘Be Debt Free in 90 Days’
It’s really impossible for anyone to make such a promise without knowing the extent of your debt situation. No company can possibly accommodate that promise without analyzing your finances and your income. While it may be quite possible to settle your debts in 90 days, it is also possible for you to do it on your own through negotiations with creditors at no cost to you. Never go with any company that promises results in a certain period of time without knowing your financial situation. This misleading idea can cause many debtors to keep on spending if they think it will all be over in just 90 days.

Promise #2 ‘Settle Your Debts for Pennies on the Dollar
Another popular catchphrase fools people into thinking they can pay way less than they owe and get debt free in an instant. Sorry but it doesn’t work that way. There are occasions where a debtor will settle your balance for less than you owe but it isn’t that simple. There are tax implications for settlements and you still have to work through the negotiation process with creditors, which is not a simple task. Some creditors will not agree to settlements, especially for ‘pennies on the dollar’. Each creditor will have different requirements. Again, no company can promise you this kind of deal without first knowing where you are financially.
 
Promise #3 ‘We’ll Do It All’
Sure they will do some of the legwork but it’s up to you to ensure the process is done correctly. Many companies will entice new customers based on the premise the customers never have to speak to creditors or bill collectors again. However, ultimately the debts are legally yours. If you never maintain communication, especially written, with your creditors you will have no idea what is going on. Some people go so far as to forward their mail straight to the debt settlement agency. This is a huge mistake. You’ll never know what is going on, much less if your bills are being paid, if you don’t receive your correspondence. Again, you have the power to do your own negotiations and settlements with no third-party agency fee.

Promise #4 ‘Debt Assistance Is Never Free’
Not true. While most debt settlement companies will charge fees upfront and during the time of service, you still have the option of handling your creditor negotiations on your own for free. Plus, there are many reputable non-profit agencies that will charge a much lower fee to help you with your debt concerns. It seems like for many companies the bigger the promise, the higher the fee. Do your homework before signing on with any company and make sure to inquire about service rates and fees that go along with their programs.