Hey all, I figured that this would be some usefull information
I have worked collections for banks in the past and figured that I can provide some usefull information.
First of most debt settlement companies are scams! Settling your debt is an option that any consumer can do, not have to pay a 3rd party to do it. If someone is drowing in debt the best thing is to try to negotiate yourself. many banks are willing to settle accounts directly with you if your are past due.
Second debt settlement companies tell you half truths. Will they settle your debts, maybe, but not always. They tell you not to talk with your creditors, to keep you in the dark about what is happening and to only pay them. The funds that you pay them go to a savings account that they draw interest off of and they sit on until you have enough to start settling your debts. They don't tell you that it may be 2-5 years before they even contact your creditors with an offer. Accounts can charge off (become a bad debt) or be outsourced based on risk from around 4 months on. If it gets outsourced, it may even go to an attorney (they don't tell you that). If that is the case, you could wind up sued and settlement may not even be an option at that point. Lovely. They when you finally realize this you contact the debt settler to find out what went wrong only to find out that their contract entitles them to your money if you don't stay with them. Its a trap. Oh and non profit organization just means they can't sell the business for a profit, does not mean that they can't each have 6 figure salaries while they are there.
The best option is to:
Settle with the banks yourself ( they can break it up to payments too)
or if you don't want to mess with it, or if you have a bank that is a particular butt head, contact a local, legitimate attorney, to do it for you. Just bear in mind that you will need lump sums to do that or be able to maintain your min payments to hold the accounts at the same delinquincy so they don't charge off)
Or go with a legitimate credit counseler, especially if they are listed with the National foundation of credit counseling, because that would mean they have rules to follow. If you go to a credit counseler make sure 2 things. 1 that they will pay your creditors within a week or so after you make the first payment to them. If they say that it takes them 30 to 60 days, NO! They actually would pocket that amount for themselves. And that they are with the National Foundation for Credt Counseling.
I hope this helps,
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