5 Absolutely Vital Things You Should Know Before Considering a Debt Settlement Program
1. No Advance Fees - In 2010 the Federal Trade Commission passed an amendment to their Telesales Rule effectively banning all advance fees. Unfortunately, not all debt settlement companies comply to it. One of the most important questions you should ask your potential debt settlement company is "Do you charge advance fees?". If the answer is yes, continue shopping until you find a company that doesn't.
2. You may be sued by your creditors - If you stop paying your creditors they may cue you in civil court. Although this practice is still the exception and not the rule, you should be prepared for this and know your rights if you are sued. What happens, can your wages be garnished, can they attach bank accounts? Generally the answers depend on your state of residence, where you bank and how you are paid. For instance in some states it is not possible to garnish wages. If you are self employed and do not receive a recurring paycheck, there is no paycheck to garnish. However, if someone banks at the same financial institution that they owe money to, it's not uncommon for that institution to freeze your bank account and seize the funds without going through the courts.
3. Your debt may be past 'Statute of Limitations' - Did you know that most states have a law that basically says that unless your creditor collects their debt within a prescribed period of time after you default they lose rights to do so! Effectively, you have a chance to 'run the clock out' on your debt at which point your creditor has to release you from it. For most states this is a period of 3-4 years. Give us a call and we will be happy to let you know what your states statue of limitations is.
4. Debt negotiation organizations that settle accounts in bulk sometimes get preferential treatment - One of the benefits of signing up in a debt settlement plan is the ability to have your debt included with many others giving it 'power in numbers' Because debt settlement firms have on-going relationships with most creditors they are able to negotiate more favorable bulk settlements for two reasons: 1- The creditor understands the value of a relationship that always stands behind their offers, and 2. - the creditor is able to settle multiple accounts with a single point of contact, making it more efficent for them and thus allowing lower settlement percentages.
5. Creditor Harassment is the #1 reason most debt settlement plans fail - Your creditor often hires aggressive collectors whose sole job is to make you believe that working with a debt settlement company will only lead to law suits and lack of results. The problem is that these agents are often commission based and any dollars they can pull from you are better than nothing. As such, they try to convince you to take partial payments and unrealistic payment plans. The problem with this method is that the payments only go toward their debt and ignore all your other creditors. If you default on any payment plan they arrange, you generally lose any 'payments' you have made and the debt is back to square 1!
Learn more about the great offerings from National Settlement Services in Tampa, Florida who can help you get out of debt while working with a reliable and reputable firm.