The real story behind ‘Debt settlement’
A recent article, might give pause to those debtors considering “alternatives” to bankruptcy. While the industry bills itself as offering “debt settlement,” in fact the settlement of outstanding balances owed on credit accounts is actually in the hands of the credit companies. These companies may reject the payments made by a debt consolidator as inadequate and pursue their remedies, including lawsuit, against the consumer. In fact, there is no agreement between the debt settlement agent and the credit company, just a promise to make regular payments out of the customer’s account. Since these companies are for-profit, their fees take priority before they attempt repayment of consumer debts. And since repayment is in their control, they may satisfactorily negotiate some accounts while failing to adequately contribute towards the others. The saddest aspect of this industry is that its customers may “drop out” after attempted settlement and file bankruptcy in order to deal with their debt, what they were trying to avoid doing in the first place.
