Debt Settlement Services Do Not Work

You’ve probably seen advertisements for debt settlement services – “settle your debt for pennies on the dollar” – and have been tempted to call. Or advertisements that say, “the credit card industry has been given billions, and is now trying to clear bad debt from its books.”

These are nonsense. The New York Times has a long article on how the debt settlement industry overpromises, and under-delivers, often leaving people in worst position than they were in the first place.

From the article:

As the industry has grown, so have allegations of unfair practices. Since 2004, at least 21 states have brought at least 128 enforcement actions against debt relief companies, according to the National Association of Attorneys General. Consumer complaints received by states more than doubled between 2007 and 2009, according to comments filed with the Federal Trade Commission.

“The industry’s not legitimate,” said Norman Googel, assistant attorney general in West Virginia, which has prosecuted debt settlement companies. “They’re targeting a group of people who are already drowning in debt. We’re talking about middle-class and lower middle-class people who had incomes, but they were using credit cards to survive.”

If you have serious debt, and need help, there are ways to resolve your debts, but they include bankruptcy or other kinds of legal actions – Fair Debt Collection Practices Act/UDAP – to sue on your behalf to stop harassment from debt collectors.

Damon Chetson is a Raleigh Bankruptcy lawyer who helps people living in Apex, Cary, and Fuquay-Varina and other parts of Wake County file for bankruptcy under the U.S. Bankruptcy Code, and fight creditor law suits, and defend against harassment from debt collection agencies. Call (919) 410-2826.