Bad apples in all we do.

Linda, the problem with many debt settlement companies is that they do not adequately inform customers of what they are getting into. They also enroll clients who would be better served by other alternatives besides settlement.
Settlement companies basically hold your monthly payments (in their own, interest earning accounts I would think) until you save up enough to settle. Interestingly, you could do this on your own and earn interest for yourself. They make NO payments to your creditors during this time. Therefore, you get farther and farther behind on your debts, damaging your credit. Finally, when the time comes to settle, you may or may not be able to reach a settlement with your creditors. There is no guarantee. The damage to your credit could be long term. You also pay a hefty fee for this service. If all of your accounts are not charged off already, settlement is probably not a great option for you. The problem is not that all settlement companies rip you off adn still your money. THe problem is that settlement companies often do not adequately warn and inform potential customers of what will happen or what alternatives they have.

That is just it though..in debt settlement there is nothing to agree upon until actual settlement time. Were stringing the creditors along like puppets throughout the program (in hopes they will settle when the time comes).

Once again I am far, far from that point (having 28 months left in the program)

I understand the results of being in the progam with my credit report being negative (they explained it all up front and personal)...that is not what I am worried about as my credit will get better upon completion of the program and good future on time payments.

However my main concern was them running off with my money. I have over 1000.00 invested in my reserves and have paid 3800.00 in so far. I can not afford to look back and pull out of the program.

You mentioned that there is no guarantee to negotiate. What happens to all the money I have saved up at that time? Do they give it back to me or what?

Overwhelmed with questions.

About the lawsuits...I have been told that if the Judge see's I am enrolled in debt settlement regardless of the matter of fact if they have accepted the program or not--the judge will rule in my favor.

I don't know though, as it has not got to that point yet.

I did speak to 3 attorneys over the phone about my debt settlement company and they suggested I go through with it and they all three told me the chances of lawsuit was slim to none and that the judge would probably rule in my favor as they will respect the fact I am "doing something about it".

Forgive me for sounding like a nag...but this is a big step in my life and of course I am worried and I am allowing my worry to consume my life.

I just hope all the information the attorneys stated and the debt settlement program stated are legit.

Thank you.

Hi, Linda...I was just reading your post and wondered if the debt consolidation you are going through is one of the non-profit organizations out there?

Hi gnnssgrl,

No, they do charge a portion for their fees, so I am assuming they make alittle money for helping people like me.

Ok, thanks, Linda! I was just wondering because I'm thinking of using a debt consolidation of some sort and am trying to find the best alternative.

Whether you chose a debt settlement program or a consolidation plan, the crux of the matter is to have something everything in writing. It reminds me about FYI who often says, "If you don't have it in writing, it never happened" Documentation is a must to prove your trial.

debt settlement3 programs often take longer time to deliver its outcome. The debts also get significantly reduced to half the total amount. You have to keep in constant touch with your counselor and get the latest updates on the negotiations. As you have the contract signed with the company, there is a slim chance of them running away. But like LessIsMore said, all companies make 'attempt'. So you must have everything documented to prove your portion.

Linda,

I am also with debt settlement, third month almost. My company was very upright and honest with me, my husband and I researched them thoroughly before signing up. We read over our contracts before entering into the program and believe everything to be legit. I too worry about lawsuits from one creditor in particular. My credit counselor told me that getting sued can happen, slim chances though. She also stated that if one creditor does decided to sue then they will do everything in their power to deal with the courts etc. It does play in our favor that we are in a program, trying to do something about the debt. It's not guarantee that there won't be a judgement but it is a chance we must take. She also stated that we can always ask for more time from the courts in order to get the debt settled.

Paydayavenger...

Thanks for replying..I just was wanting to hear from someone other than what I know in a settlement program. My company also told me that I could be sued, but chances were slim--COURT IS TO COSTLY and they get to write it off and claim more than what I owe them actually. But still there is that minor possibility.

Hey, lets make a deal to keep updating each other with how our program is going to reassure both of our thoughts...ya know what I mean.

Lessismore:

I completely understand your frustration and the need for you to file bankruptcy. BELIEVE me, I had an appointment with the lawyer to bankrupt and having watched my parents go through the whole nasty ordeal I called them three days before my appointment. THEY literally begged me not to go through with it and told my my credit would be ruined for years (however my children are young and I have years to rebuild)...well, he told me to go watch CNN and they advertise this company for debt settlement and that he wishes that he would have went through with that, however they owed like 250,000.00 and was not eligible because most of it was secured loans vs. unsecured.

Having him had said that, I did my studys and decided what the heck. Now, I will tell you that my father had many credit cards racked into on top of the 250,000.00 debt and NONE of them has every tried to sue him, they nagged him and sent threatening letters that soon stopped all together. One of which I remember being Capitol One.

SO, I spoke to an attorney the other day and worse came to worse scenerio: If I get taken to court over a card and a judgment is filed against me---wham bam, I will be out of the program and into bankruptcy court. Simple as that....the attorney that I spoke with told me my best odds actually were to stay in the program, getting some money back was better than the companies receiving nothing back. He also stated that with "everyone" defaulting because of the new law on minimum payments, the companies are going to want SOME MONEY BACK...

I have been told so much information from so many people that I kind of like to get on here and compare notes.