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Categorized | Other

Should I use a Debt Settlement Company?

I am amazed at the number of people who choose to hire a debt settlement company.  I realize that you are being bombarded with advertisements that claim that they can help, but the truth is that most of these agencies are scams, or, in a better light, simply not worth the money.

The scams are quite frequent.  I have had a number of clients contact me with the same claim, that they have paid several monthly payments, sometimes up to 18 months worth,  only to find that the settlement company has done nothing or worse, gone out of business. 

Other clients contact me and say that the settlement company did help them.  When I hear that, I always dig further.  Client X called me a few months ago and told me that a debt settlement company got a $20,000 credit card debt reduced to $12,000, which he thought was a great deal.  Then I asked him about payments and he told me that he had made 19 $1000 payments to the company.  I asked him to do the math and I could see his jaw drop through the phone.  He was charged $7000 to obtain a net  $1000 reduction on his claim.  To make matters worse, we found out that they have given him bad advice on a claim that they could not settle.  (That is why he contacted me). 

He received a lawsuit from a collection agency that the debt settlement company could not settle.  The debt settlement company advised him to send a letter to the court explained his financial difficulties.  Fortunately, he contacted me before sending the letter.  Had he sent that letter, he would have lost the  case for sure.  Instead, we filed objections to the lawsuit (for a very, very small fraction of the $7000 that he was charged on the other claim) and had the claim dismissed.

If you are facing a collection agency claim, generally the last place that you want to go is to a debt settlement company.  Call my office at 412-823-8003 or 1-888-536-6644 for a free, no obligation review of your claim.

One Response to “Should I use a Debt Settlement Company?”

  1. Interesting. I like many others have pulled out all the stops for this xmas and am thinking about how I am going to pay back the credit cards. I will think about this and some of the other ideas on your site which may help repaying some of the cash after the holidays.


Credit Card Lawsuits

If you are faced with a credit card lawsuit, whether its an original creditor or a junk debt buyer, contact my office at 412-823-8003 right away. We offer a free, no obligation review of any credit card based lawsuit that is filed in PA.

FDCPA Attorneys

Many Debt Collectors threaten people, that's a fact. Threats of wage garnishment, jail, fraud charges and contacting employers, friends and relatives happens every day to people just like you. The truth is that most of these threats are illegal. If a debt collector is threatening you, contact our office at 412-823-8003 for a free initial consultation.