Posted By:John Ulzheimer
Topics:Bankruptcy | Debt | Credit Cards | Credit
"On the Money" ContributorJohn Ulzheimer is a nationally recognized credit expert and contributor to On the Money. Learn more at Credit.com or JohnUlzheimer.com.
Q. There are several companies offering to cut your debt in half and make one low monthly payment. If you are carrying large amounts of debt is this an option? How bad will this hurt your credit and for how long? I can't seem to get a straight answer on this. --Darrell S.
Ulzheimer: Hi Darrell. I don’t normally use the word “hate” but in this case I have to do so. I hate that debt settlement companies are allowed to use deceptive marketing like this. It’s my opinion that a lot of these guys belong in a 5x9 cell for what they are doing to consumers who are in desperate situations. Here’s the truth about debt settlement companies…
- The first thing they require you to do is stop paying your bills. This causes your credit scores to tank and might even get you sued by the lender or their collection agency. That’s not in their marketing literature or television commercials. Their theory is that they are going to make your credit card issuers desperate so they can ride in on their white horses and offer them some smaller percentage as a settlement. Of course, you can do this yourself.
- Next they ask you to start paying into a fund that they will use to pay your creditors eventually. Of course, you can do this yourself.
- There is no guarantee that your lenders will accept any settlement offers. Of course, they don’t tell you this in their ads.
- They don’t tell you how much of your money they keep as their fees. Of course, they don’t tell you this in their ads.
- They certainly aren’t truthful that settlements are just as damaging for your credit reports and scores as collections, judgments, tax liens, repossessions, charge offs, foreclosures, and repossessions.
Link to Original Article:
***Keep all this in mind.
AFI
Thursday, August 21, 2008
Why the 'Debt Settlement' Business Is a Scam
Posted by Auto Finance Insider (AFI) at 4:02 PM 0 comments
Subscribe to:
Posts (Atom)