Consumer debt is on the rise as the credit card debt in the United States increases. Debt settlement agencies continue to grow as people search for financial relief. Many debt settlement agencies are legitimate and could help debtors pay off the debt at a possibly reduced rate. Other agencies may be less helpful, and you could lose some of your hard-earned money with nothing to show for it. You could also find yourself still in debt and facing legal action from your creditors.
Some debt settlement agencies claim to erase your debt quickly and easily. This is a false promise. You will be required to make some sort of payment on the debt. If you are overwhelmed in debt, bankruptcy can eliminate your debt without making payments to the creditors.
Research
Before you sign up with a debt settlement service, research the company. Check online for reviews, or the rating at the Better Business Bureau could give you some idea as to the reputation of the company. You can also find information from the Association of Settlement Companies, a trade group that provides a code of ethics and professional standards.
Sometimes a reputable debt settlement company can get as much as 50% taken off your total bill. Most of the time, they would like this in a lump sum amount. When you have paid the reduced rate, the debt will be marked as paid. If you sign up for a payment plan, these payments can last a long time and any number of occurrences can stop your ability to make the payments. You could be worse off financially if you have to stop making payments to the plan.
If you are behind in your debt, and considering talking to a debt settlement firm, contact a Houston bankruptcy attorney to see if having your debt legally eliminated would be a better option for you.