Want To Get Out Of Debt? Don’t Rely On Debt Settlement Companies

Admin — Tue, 27 Apr 2010 22:41:45 +0000

For millions of Americans who want to get out of debt, the smooth advertisements of the "debt settlement" companies are a little too hard to resist. They promise to settle your debt for pennies on the dollar. They promise to get you out from under credit card bills that you can’t pay. But do they get the job done?

Well, for the most part, no.

The U.S. Government Accountability Office recently announced that an extensive investigation found rampant fraud, abuse and misrepresentation in the debt settlement industry.

The following is a quote from a GAO report to a Senate committee about what the investigation discovered....

While we determined that some companies gave consumers sound advice, most of those we contacted provided information that was deceptive, abusive, or, in some cases, fraudulent. Representatives of several companies claimed that their programs had unusually high success rates, made guarantees about the extent to which they could reduce our debts, or offered other information that we found to be fraudulent, deceptive, or otherwise questionable.

It turns out that many of these debt settlement companies charge very large up front fees which customers are not able to get back later if they are not pleased with the results. Some of them even claim to be government-approved or part of the economic stimulus program.

The GAO says that fewer than 10% of the people who hire these debt settlement companies actually settle their debt for "pennies on the dollar".

So if you do hire one of these companies you might want to keep your expectations in check.

The reality is that most people who sign up with these companies fall further behind on their debts, they see their credit ratings go down the tubes, and they often end up having collection agencies coming after them.

The bottom line is that if you want to get out of debt you should not rely on a debt settlement company. In addition to being out the huge fees that you pay to such a company, you will probably just ruin your credit and end up much farther behind on your bills.

The truth is that you would be much better off trying to reduce your expenses, working with your creditors to construct a reasonable payment schedule and figuring out a way to start bringing in more income.

So what do you think? Do you think debt settlement companies are the way to go? Have you had a positive or a negative experience with a debt settlement company? We would love to hear your story - please feel free to leave a comment below....

Five Tips That Can Help You Get Out of Debt – How Consumers Can Legally Eliminate Debt

Admin — Sun, 14 Feb 2010 20:40:07 +0000

Five Tips That Can Help You Get Out of Debt - How Consumers Can Legally Eliminate Debt

By Ryan Worthington

Are you a consumer who ran into some financial trouble that has spiraled out of control? If so, you may be looking for tips on how you can get out of debt. If so, keep reading on for some helpful debt relief tips that you should implement today!

1 - Decide to Take Action

It is one thing to research your debt relief options and another thing to actually go through and implement them. Implement them is what you want to do. If you are serious about getting out of debt, be truly serious. Getting back on your financial feet isn't too difficult, but it isn't very easy either. Know and be prepared for some financial ups and downs.

2 - Focus Your Attention on Debt Settlements

When it comes to seeking debt relief, you have a number of choices. Three common choices include bankruptcy, consolidation, and settlement. Your best option is likely settlement because you still pay some of your debts (making good on what you do owe), but you don't pay all of them. A percentage of what you do owe gets forgiven or eliminated and this percentage is typically around 60%.

3 - Enroll in a Debt Relief Program

If you were to opt for bankruptcy or consolidation, you would need professional help. Someone needs to help you with bankruptcy proceedings or someone needs to give you a consolidated loan. Settlement is a bit different because you can negotiate with your creditors. Despite the fact that you can handle the negotiations yourself, it is within your best interest to enroll in a debt relief program. They handle the negotiations for you and then help you make payment by setting up a payment plan.

4 - Trim Your Spending & Apply That Money Towards Your Debts

Enrolling in a relief program is recommended and you should have monthly payments that you can afford to make. On that same note, you will get out of debt faster if you can pay more. So what you should do is look at your spending. Focus on your monthly bills and everyday purchases that do add-up. See where you can eliminate or reduce purchases for the time being. Take this extra money and use it to get out of debt faster!

5 - Make Your Agreed Upon Payments

Finally, it is important to make your agreed upon payments. If you enroll in a debt relief program, these on time payments can help improve your credit score little by little. Most importantly, it is the only way for you to regain control of your finances.

If you are over $10,000 in unsecured debt you really should consider getting a debt settlement. Creditors of unsecured debt are fearful of collecting and they also have stimulus money to make debt settlements financially feasible for them. Once the economy turns around it will be too late to eliminate your debt.

Check out the link below to locate legitimate debt relief companies in your area: Free Debt Advice

Article Source: http://EzineArticles.com/?expert=Ryan_Worthington

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How To Get Out Of Debt » Debt Relief

Want To Get Out Of Debt? Don’t Rely On Debt Settlement Companies

Five Tips That Can Help You Get Out of Debt – How Consumers Can Legally Eliminate Debt