Are there any reputable, established debt settlement companies or are they all suspect?
Have searched and searched for a debt settlement company that has a good reputation of standing. So far, all seem have a lot of customer dissatisfaction. I never seem to read more than one or two compliments on any given company. Any way to find a legit one?
Be your own debt settlement representative. In most cases you can arrange your own settlement. They may require you make some payments for a few months and then discuss settling the debt. You don’t need to hire a company.
Stay away from any "debt consolidation" company that promises to cut your debt and payments in half through debt settlement….This is a risky tactic of deliberately ceasing all payments to creditors and forcing your accounts into default to attempt settlements. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating for sure. Debt settlement is like a roll off the dice with your finances…You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
Many people who sign up with “debt consolidation” firms incorrectly assume that they have the power to force your creditors to accept settlements…they don’t. Your creditors have the right to refuse settlements and take you to court.
See this as an example of what can go wrong with debt settlement:
http://www.ripoffreport.com/Credit-Debt-Services/Debt-Settlement-Amer/debt-settlement-america-dsa-6a285.htm
http://www.ripoffreport.com/Credit-Debt-Services/Able-Debt-Settlement/able-debt-settlement-adsi-adsi-86832.htm
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Even if your find a company with a perfect BBB rating, there’s still a big risk in deliberately defaulting on credit cards to settle and no firm can guarantee that you won’t be sued.
If you want to do debt settlement anyway, then you don’t have to pay any firm to ruin your credit rating…you can do this yourself by stop paying your cards for 4 or so months and use the money saved to try to settle. If you succeed, you can settle for less…if the process fails, you will end up in court.
Actually, you can negotiate and settle your debts on your own. That will spare you from paying debt settlement fees asked by private companies. Because, believe it or not, banks are more willing to settle debts especially now with the new credit laws. Simply put, banks will just settle for less rather than receive nothing at all.
You just need to know your rights and how to talk to collectors.
Talk to them calmly. Never lose your temper but also never sound intimidated. Tell them that you’re not trying to run away from your debt. Rather, you want to reach an agreement that would allow you to pay given the challenges you’re currently facing brought about by the recession (Don’t detail your problems though). Make sure that they know that you know your rights so they can’t bully you.
You may want to read up on the Fair Debt Collection Act. These articles may also provide info that could help you:
http://familyfinancialhelpusa.com/protect-your-right-to-fair-debt-collection-by-knowing-the-limits-of-debt-collectors/
http://familyfinancialhelpusa.com/credit-reform-bill-to-ease-debt-problems-of-consumers/