are all debt settlement companies ripoffs

well it all depends on what you call a rip off. i did use a company myself that really pulled our family out of a big mess. but there are alot of companies out there that take the money an run. this is something you can do yourself but alot of people like me could not do that at the time. now, i would do this myself scince i am alot more informed as to how it works. but then they were a god send. but be very cautious in choosing a company there are alot of scammers these days

I worked for a legitimate settlement company, but yes, there are many many scam companies out there also. You really need to be thorough in your research on these companies, because even the company I worked for had an "F" rating with the BBB just because of the industry - it was actually a very good company with very happy clients.

Hi, first of all I looove how you ask a legit question and you get three advertisments..niice... But on a personal level, I am very happy with the settlement company that I went with, don't know if I should say the name or not but I've been with them for almost 2years and have never had a problem. They have real verifiable credentials and it help my situation. I don't know what yours is and I don't want to lead you in the wrong direction, everyones situation is different. I won't say the name but they are located in Lawrence Massachusetts and have been in biz for seven years ( i'm sure you can google them) . I have nothing bad to say. Good luck in your search.

No not all settlement companies are rip-offs, however in this business there are no regulations in which case you do have many fly by night companies. The only rules we have to abide by are FTC regulations for telemarkting. Finding a Debt Settlement company that will work for you can become a headache over time especially with so many different companies telling you they're better then the next. The only thing you can really do is but in your due diligence.

I would call DS Financial 866-833-6398 they charge a small fee and don't really get paid until after the job is complete and they don't deposit your money it is your responsibility to pay the creditor once the settlement is obtained.

Any questions you may have about the settlement process please feel free to contact me [email]nicholebehers@crusaderservices.us[/email]

Please beware using a debt settlement company ("DSC"). Debt settlement companies should rarely be used as they will make your credit worse with no guarantee that they can settle with creditors.

Debt settlement companies will attempt to sell a customer their product by claiming that a) they have settled millions of dollars for other customers, b) they will settle the customer’s debt with no interest, c) they will save the customer money now, and d) they are experts at negotiating.

However their claims are extremely misleading.

Debt Settlement Companies have no incentive to settle your debts

Let’s look at how a debt settlement company operates. Typically, a debt settlement company will charge the customer a 15%-17% fee of the total debt owed. These fees are paid up front by monthly installments. This will usually take 90 days.

Why do debt settlement companies want you to pay your fees by 90 days? The answer, creditors will not take severe action in the first 90 days. Thus, the debt settlement company needs the customer to pay all their fees before the creditor actions get worse for the customer.

Once the debt settlement company gets their fees, there really is no incentive for the company to settle your debts because the fees are usually nonrefundable. In fact, the debt settlement company actually has an incentive to keep the customer in the program because they are usually collecting other fees such as account maintenance fees.


Debt Settlement Companies encourages you to breach your contract but will not protect you from the risks from breaching the contract

The instant savings promised by the Debt Settlement Company is achieved by the customer stopping payments to his creditors. This causes the customer to default on his creditors. This is a breach of contract, and the creditor may sue the customer.

Now the Debt Settlement Company cannot represent the customer in court. The Debt Settlement Company is not a law firm and it would be illegal for them to offer legal advice. Therefore, the customer is in court without any help. The customer may have to get an attorney. If not, the customer can face wage garnishment, levy, and judgment.



So basically the customer has taken the risk of law suit by following the DSC's advice, but will be hung to left dry if they are sued.



DSC's have no power to force a creditor to negotiate nor can they force a creditor to negotiate to the original balance.


Many times, DSC's will state that they have settled millions of dollars. However, what they do not state is that this settlement is many times higher than the debt the customer originally had when enrolling in the program.



For example, say a customer started the program with $10k in debt. After defaulting, the creditor charged fees and interest raising the debt level to $20k. Now the DSC may settle it for 15k, reporting a 5k savings. But really the customer experienced a 5k increase in their debt. Add the 15-17% charge and the customer is a in much worse position than before.


I could go on, but the bottom line is be very wary of hiring debt settlement companies. Your best best is an attorney, or a debt consolidation company.



How do I know this? I worked for a DSC.

Also, remember the basic business model of a DSC is this. Customer saves for x amount of years, usually 3. They also default on their obligations. The money is then used to negotiate with the creditor.

A customer can do this on their own, save 15% fees, and not ruin their credit. Start a bank account, set up an automatic transfer and talked to the creditors.

I mean even the NSF and Maintenance fees can add another 500 dollars a year. After 3 years thats an extra 1500 dollars!