Settlement company may not provide debt relief

Settlement company may not provide debt relief

| Jun 16, 2020 | Uncategorized |

The ads look enticing, and for someone who is struggling with overwhelming debt, the promises a debt settlement company makes may be too good to resist. A debt settlement company may offer an easy alternative to bankruptcy and promise to eliminate debt altogether. With more than half of those in Michigan and across the country dealing with crushing debt, the assurance of debt relief may seem like a miracle to some who are feeling hopeless about their situations.

Unfortunately, many debt settlement companies prey on the desperation of consumers by making promises they cannot keep. The process for debt settlement involves the risky step of the customers turning their credit information over to the company and ceasing payments on all their debts. They then make monthly payments to the debt settlement company until they accumulate a certain amount in their account, which may take up to a year. Only then does the company reach out to negotiate with the creditors for lower payments.

What debt settlement companies do not reveal is that after consumers stop paying their creditors, the debt continues to accumulate with added interest, fees and fines. Creditors may also report these accounts to credit bureaus. Many consumers follow the program of a debt settlement company only to learn that their creditors are not interested in negotiating with the company.

Overwhelming debt can feel like one is drowning. However, there are options available for debt relief, including the immediate relief bankruptcy can provide. By speaking with a compassionate and experienced attorney, Michigan consumers can learn if bankruptcy is appropriate for their circumstances and how a successful process can bring peace of mind to those who are struggling with the burden of debt.