Have you considered using a debt settlement company for your over leveraged credit lines? What's the best method, service provider and option for you as a consumer? These are questions that many people should be asking before they answer an ad for a company who "specializes in debt consolidation.
" Many companies that perform debt settlement and consolidation have a couple of pitfalls.
First off many of them negotiate with your creditors and set up a payment plan, then the funds that they collect every month are accrued and collected for their fees first, then after a period of time up to six months your capital is being applied to their costs and not your debt.
Secondly they are consumer advocates and not necessarily attorney based there for when your creditor decides to sue you for settlement trying to force your hand into financial turmoil or bankruptcy you get dropped from the debt settlement company.
Scenario case and point we had a client in our office who needed a debt settlement service so we directed them to a known source.
The payment plan was negotiated and set up for three years.
Soon after the program started the clients proceeded to make the required payments.
After three months and $7,500 later the clients received a notice from their mortgage company.
They were being sued, after contacting the debt settlement company 3 days before the end of the refund policy they talked it over and decided to file bankruptcy.
The couple called the debt settlement company back and they were informed of two issues.
1) Yes we see you have been issued a lawsuit by the mortgage company & that they would not be receiving any refund.
2) You are also being dropped from our program because we do not have an attorney on staff, Needless to say we had some very, very upset clients for the obvious reasons of loss of thousands of dollars and now being dropped for something totally out of their control.
Now they had to file a bankruptcy to save their home, which translated into more of an expense and more headaches.
Another scenario plays the same way; the debt settlement company charges a fee of $14,000 up front on $100,000 in debt.
The credit card company receives no payments for several months and issues a lawsuit.
The clients are out the months of payment for debt settlement, they received a total of three months and simultaneously were dropped from the debt settlement company because they did not have an attorney on staff.
When it comes to debt settlement you need just as much legal protection in this arena as you would to modify a loan or start a corporation and draw up the documentation.
Time and time again people fall victim to companies who are out for their own agenda and business gain.
It's sad yet people make decisions based on emotions and not necessarily on well thought out or planned out strategy and they wind up with either a band-aid on a sever wound that needed proper medical attention; or they wind up with a situation that is far worse than the one they started off with.
Also besides having the professional advise of an attorney you have the representation to assist you when those creditors retaliate against you.
This way you can rest assured that you are protected and safe from those unexpected bumps in the road.