Reject Settlement Scam, Accept the Right Program

    The economic landscape today is choc-a-bloc with financial jams and fraudulent scams. They have become everyday occurrences and are alarmingly increasing day by day. So to safeguard yourself against them, choose the company with the right credentials for your debt-consolidation and your debt-settlement. You have to be very cautious about the choice of company as it should be able to give you authentic and ethical services and relieve you from more heartburns and harassment. A lot of these debt-settlement agencies shout out slogans of being “non-profitable”, but do not get taken in by the face-value of “no-profit” as appearances can be deceptive. On the onset, don’t get confused by the similarity of the concept of debt-consolidation or debt-negotiation as both these programs completely differ in their individual concepts. 

DEBT SETTLEMENT- Usually, such programs prove to be quite an expensive affair. Once you enroll for the services of a company providing a program for debt settlement, you are charged an “admin fee” as a lump sum for effective handling of the debt accounts and for negotiation on your behalf. Additionally, the company also charges a service fee each month; however this fee varies as per the amount and type of the debt you owe.

                The settlement company is responsible for the monthly collection of the debt charges from you and then for its distribution amongst your creditors. The amount collected from you is safely deposited in an entrusted account for the time period when the company is engaged in negotiations with your creditors to reach a specific reduced payback amount. The sum collected from you gets accumulated separately in your special trust account over a time period of months and is finally paid back to your creditors once the complete sum has been collected.

         However, this is a time-consuming process as it is dependent on several factors. The outstanding debt amounts to be paid to your various creditors and your current financial condition for debt repayment are a couple of the factors. However, there is a possibility that during this payback time spread over several months, your creditors might file a case against you and eventually you might have to pay extra money.

         One of the major drawbacks of these debt settlement agencies is that these agencies do not request the creditors to restrict the over-limit fee, late fee and interest being charged. Hence, while the negotiations on the settlement are going on, you shall still accrue interest and late fee, which would result in your debt amount further piling on. Hence, it is quite possible that you might end up paying an inflated debt sum if you are sued by a creditor.

          If you go wrong in making the choice of the right company for debt-settlement, your worries and troubles might double. The company might not give you a clear picture about the working of a settlement program until you enroll for its program and sign a contract with the company. Even after enrolment, you might not be completely aware of the company’s monetary transactions. Only after you have succeeded in getting answers to the several relevant questions you have asked the company, you might be able to gain complete knowledge about the total transaction.

TAKE A LOOK AT AN EXAMPLE OF ONE OF THE DEBT SETTLEMENT OPERATIONS-

For instance- If there is $20,000in credit card accounts which are unsecured and you owe this to three different credit card firms, then the debt that you have to repay is $3,000, $6,000 and another $11,000 to all three respectively. You have taken a 5 year program under which you would have to pay $200 per month to your settlement agency to become debt-free in a span of 5 years. Once, the 4th month installment of the $200 is put in your separate trust account, the agency charges you an extra $50 as their service fee and this gets deducted from your monthly installment. Hence, only $150 is credited to this trust account from 4th month onwards.

             As per usual practice, the settlement agencies negotiate about 50% of the amount that you owe. Suppose, your debt is $3000, the creditor you owe money may agree to take $1500 (after deduction of 50%) as full payment. Going by this rule, one credit card might take about 10 months to be paid off while the other creditors have to wait longer for their money to come from the settlement agency .Hence, the debt of $6000 shall be repaid in about 15 months-if agreed upon by creditors and on 50% reduction and a longer waiting period.

         A well negotiated agreement with the creditors is the best possible way to pay back your debts. You would have to successfully convince and pursue them to stop charging you additional interest or late fee. A convincingly and successfully done negotiation with the creditors could save you a lot of money, which otherwise might be required to be paid to the settlement agency as fee.

         If you take a decision to step out of the program, most settlement agencies would allow your account to be cancelled and refund what you have already paid, except the service fee they charged you monthly and the admin fee which is non-refundable. However, if you are a wee bit doubtful about the reliability of the agency’s services, you can challenge them.

          Seek aid from the Better Business Bureau; examine reports of the various agencies before you zero down on one .You also have an option to consult an attorney for severe cases.

           You need to carefully test the waters before you make the right choice of the settlement agency. Check on the minutest details of the firm before you divulge your case details. There is no denial that there are scores of reputed and authentic debt settlement firms in US, with a little research and study, you would certainly be able to find the right one for yourself.

If you feel Credit Card Debt Relief would be of benefit to your situation, please contact Debt Regret- Debt Consolidation Company for a free, no obligation, consultation.
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