Why Chicago Debt Settlement Companies May Not Solve Your Debt Problems
Score another one for the consumer. Debt settlement companies are no longer allowed to charge upfront fees, thanks to the Federal Trade Commission's attempt to clean up shady debt relief practices.
That must make debt settlement a good deal, right? Unfortunately, that's not the case. There's a reason that debt relief companies - or scams, as some might call them - may make your debt problems worse rather than better, say Chicago bankruptcy attorneys.
Debt settlement companies claim to do just that - settle your debt - by negotiating a deal with your creditors. Problem is, while they're negotiating, they usually ask you to stop sending payments on your debts. Meanwhile, there's no guarantee that they'll get your payments lowered, since technically debt settlement companies have no more pull with creditors than an ordinary customer. Furthermore, some companies don't even get around to negotiations until months after you've ceased payment - and if you're unfortunate enough to fall for one of the many debt settlement scams, they may not contact your creditors at all.
Eliminating upfront fees is an important first step - at best, it will prevent well-meaning folks from getting ripped off right off the bat. But it doesn't solve the whole problem. Debt settlement companies can still charge you for services rendered, whether or not they lower your debt - and in some cases, even if they make your debt worse. That's right, by withholding payment and allowing someone you don't know to negotiate with creditors on your behalf, you risk hurting your credit score and actually increasing your debt.
If you want to fix your finances for good, consider the only debt relief option that's your right courtesy of the U.S. Constitution. Bankruptcy makes your debt better, not worse, by offering an affordable payment plan and legal protection - not to mention the expertise and advice of a professional bankruptcy attorney. Want to find out more? It's free when you sign up for a complimentary one-on-one debt analysis with a Chicago bankruptcy attorney.