Debt Settlement Victims

Debt Settlement, Debt Consolidation or Credit Counseling Victim?

If you are the victim of a debt settlement, debt consolidation, or credit counseling company, click here for a free initial consultation.

Those annoying debt settlement auto dialer calls and television advertisements can be more than an annoyance–they can take you from a really bad financial situation to a really, really, really bad financial situation, with the added bonus of a hopelessly trashed credit score.

Debt settlement companies target individuals initially victimized by credit card banks and exploding credit card debt. Consumers are persuaded to pay steep fees for debt reduction programs to negotiate settlement of credit card debts. Unfortunately, many times the debt settlement company picks off one or two easy credit card settlements, but then cannot complete the remaining promised settlements of more difficult accounts.

Even though the consumer has been making payments to the debt settlement company, and continues to make payments, the consumer gets sued because her payments are not going to her creditors. When it comes time to defend the lawsuit, the debt settlement company is nowhere to be found and the consumer is on her own without a lawyer to defend the lawsuit. To add insult to injury, the fees paid to the debt settlement company are far more than would have been required to hire a competent lawyer in the consumer’s home state.

Many debts settled by a debt settlement company may at first sound like good settlements, but further scrutiny suggests otherwise. Is a 40% settlement of an uncollectible, time barred debt beyond the statute of limitations really that great of a deal? What about a 60% settlement with a debt buyer who has no access to account documents, has no intention or means of filing a lawsuit, and couldn’t prove its case even if its life depended on it? Frequently there are defenses and counterclaims to credit card collection lawsuits that debt settlement companies are not equipped to deal with or do not even know.

Credit counseling may not be a much better alternative. For starters, credit counseling agencies are frequently funded by the same creditors who got you into this mess in the first place. That fact is not prominently disclosed. Why is that a problem? How often do you think these credit counselors will recommend you pursue unfair debt collection claims against your creditors who also happen to pay them?

Debt Settlement, Debt Consolidation or Credit Counseling Alternatives

Before dealing with creditor funded credit counseling or debt settlement companies, consider speaking to a qualified consumer attorney in your home state. You probably will find one at the web site of the National Association of Consumer Advocates. If you are from Iowa, click here for a free consultation.