Consumer Debt Settlement
An Option To Help Settle Your Debts
Consumer debt settlement is the current euphemism for what used to be called debt consolidation. The way most companies work which advertise this service is to have you gather all of your bills, although some companies limit themselves to only credit card debt, and then total them all up. For those bills which the company is willing to “accept,” you will usually be charged something like 40% of that amount which you will pay to the company over several years as agreed. The company might charge you a service charge or some other kind of fee in addition to this percentage amount.
Results May Vary, Depending On The Debt
You are told that the company will then negotiate settlements with all of the creditors in your plan to accept no more than 40% of their outstanding debt with you. This amount will be paid as you make your monthly payments, although some creditors will insist upon a lump sum payment. That is why some companies will demand that you pay the 40% all at once. Other companies will have a different percentage demand usually ranging from 40% to 60%.
Be Aware Of Untrustworthy Companies
Although there are some good and reputable companies providing this service, there are a lot of companies which mean well but end up doing more harm than good. Then there are some companies which are just fly-by-night rip-offs. You have got to proceed with caution in this area and make sure the company you select is what it claims to be. You should always check with the Better Business Bureau and your State and County Consumer Protection or Affairs Office.
There are many reports of consumers who hired these companies to help them but in the end they were hurt not helped. You have got to be aware and proactive in this area. Remember, you want to resolve your financial difficulty, not make it worst.
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