“Ready to get out of debt?” That is an enticing question that the debt settlement companies usually ask when they call you. Although debt settlement companies claim they can negotiate with your creditors and reduce your debt, it is important to remember this is a risky business, especially for the debtor. Unscrupulous companies may offer a new, lower monthly payment however, the process takes a while . Its only after a relatively long period of time when the companies take your payments and, after collecting enough monies, they then begin to negotiate with creditors. With considerable time having passed without any communication or payments made to the creditors. Creditors are left feeling angry and ignored. Simultaneously creditors report these late payments to the credit bureau and ruin your credit score for years.
Consider speaking with attorney David Soble before working with a Settlement Agreement.
Before deciding to hire a debt settlement company remember:
- The expensive costs and fees.
- Has a debt settlement company asked you to stop paying your bills? Consider what will happen if you stop paying your bills: you will incur late fees, penalty interest and other charges. Creditors will be angry and likely step up their collection efforts against you.
- Debt settlement companies may settle most of your debt but the penalties and fees will attached to the debt and your responsibility.
- The effect on your credit score and your future use of credit.
- Creditors may bring a lawsuit against you while settlement companies are waiting for an amount they can use to negotiate.
- Settling debts results in taxable income. (Make sure you speak with an attorney about 1099-C)
You should know that you should avoid doing business with any company that promises to settle your debt if the company:
- Charges any fees before it settles your debts
- Touts a "new government program" to bail out personal credit card debt
- Guarantees it can make your debt go away
- Tells you to stop communicating with your creditors
- Tells you it can stop debt collection calls and lawsuits
- Guarantees that your unsecured debts can be paid off
The good news is that there are several options for people to get out of debt besides hiring a debt settlement company. The most important part of settling your debt is to be proactive! If you miss a payment and have a sense that other future payments cannot be made you should take immediate action.
Sure you can enter into a debt management plan directly with your creditors. However there is a level of hostility that clients experience and that remains between creditors and debtors. It's in these cases that an attorney can help negotiate a payment plan with creditors and keep them from contacting and harassing a debtor. Short of filing bankruptcy, debt mediation by an attorney like David Soble, is an excellent way to approach creditors.
David is upfront about debt mediation and he strives to settle a client's debt in a timely manner. The debt mediation process does take time, but when working with an attorney like David Soble, who is comfortable in negotiating with aggressive creditors, be assured that you will have peace of mind.
Call today so we can show you how we can help your personal economy.