How New Debt Settlement Rules Could Affect Atlanta Consumers
Negotiating the world of debt relief just got a little easier. As of last week, debt settlement companies can no longer charge upfront fees.
So does that mean you can't go wrong with hiring someone to settle your debt? Not exactly, say Atlanta attorneys. Companies are still allowed to charge for services rendered - and unfortunately, those services don't always do anything to actually fix your finances.
Most debt settlement companies work the same way. While they set out to negotiate a deal with your creditors to get your debt payments lowered, they tell you to stop making payments so you can build up enough of a lump sum to have some bargaining power. Now, in the past, they would skim some off the top in the form of upfront fees - meaning you'd initially be angering your creditors while doing nothing to lower your debt.
So what's changed? Not much, except that instead of paying the debt settlement company, you're keeping your payments for yourself - for the time being, anyway. As soon as your debt relief firm performs any kind of service - say, they make a single payment on your behalf or negotiate a debt repayment plan - they can charge you, even if they never make another payment, or the deal they work out doesn't do much to change your financial situation. And as for your creditors? They're still going to be peeved that you're not paying, and they'll let you know it with late fees and other penalties, all of which will lower your credit score. And the worst part? There's nothing to guarantee that creditors will go for a deal negotiated by a debt settlement company - in fact, studies have shown that you'd make more progress by calling creditors yourself to request lower payments.
The rules might change, but the game is the same - debt settlement companies, debt consolidation firms and credit counselors have one goal, and that's to make money, not to lower your debt. If you want to get your finances under control once and for all, consider the only surefire way to eliminate debt - bankruptcy. As your constitutional right, bankruptcy can lower or discharge your debt payments and legally protect you from creditors - no strings attached. Want to know more? Consider a free one-on-one debt analysis with a professional Atlanta bankruptcy attorney.