New with Debt Settlement-Question
Date: Thu, 11/08/2007 - 11:45
Is it SOP (standard operating practice) for the law group to collect approximately 40-46% of your agreed payback amount before disbursement to the creditors begins? This will take approx 16 months in my case.
(by the way, I did check out the law group with the BBB and they don't have a particularly high rating, but have no complaints)
And, are you happy you selected this path?
thanks so much!
Unfortunately, I haven't dealt with debt settlement. Someone wh
Unfortunately, I haven't dealt with debt settlement. Someone who has will be along shortly to help you!
As far as a company's rating with the BBB, I'd look for one with a higher rating. Just because they don't have complaints listed that doesn't make then a good company neccessarily.
The problem with debt settlement is that you pay a large set up
The problem with debt settlement is that you pay a large set up fee usually equal to your first 3-4 monthly payments which are usually slightly higher than your regular monthly payment.
After reading here and speaking to several companies, I have come to the conclusion that companies charging set up fees like this create a high risk for litigation since decisions are made once an account charges off at 6 months delinquent. Having several creditors, at least one or two will choose to sue you once the account charges off. Without having funds available at that time, you will have a judgment against you which leaves you open to wage garnishment, property liens and bank accounts frozen. Without resources to fund a settlement after one of these actions are taken against you will leave you with no other option but bankruptcy unless you could afford to have your wages garnished and continue with the program having 20-25% of your salary taken away each pay period.
Of course, this is not always the case but we hear this scenario all too often. However you look at it, you are taking a risk. I did my research and found a company without set up fees and feel very confident I have made a sound decision. I'm not saying that a company with set up fees are not going to work but knowing I will have my accounts settled prior to charging off and going to an attorneys office or dealing with collection agencies is a tremendous relief for me since my main concern was being sued and having a judgment on my credit report for 10 years. I am in my late 30's and chose this route to be able to purchase a home in the next few years. My unsecured debt was the only thing holding me back from a reasonable mortgage rate and at the rate I was going, I would be paying my debts back for the next 25 years. This alternative will have me debt free in 18 months or less and I can begin restoring my credit and have a home within the next 2-3 years.
Hope this helps.
