Beware Of Debt Settlement Companies! Debt Settlement Is A Highly Questionable Practice!

So you have may have heard or read about Debt Settlement. Perhaps not?

So what is this mysterious term and what does it mean? Ok, it’s not that complicated and some would argue its self explanatory. Settle your debt. Right? Not so fast my friends. Debt Settlement professes to settle debt and potentially can but the players the companies and the tactics by which it is often achieved are QUESTIONABLE to say the least.

As an attorney licensed and practicing in Florida, New York and New Jersey and with a huge focus on Consumer Debt Relief, I am receiving more and more clients who were once signed into an alleged debt settlement program or had already paid exorbitant amounts of money to such companies and their debt was NOT settled. Furthermore, many of these practitioners fail to inform the client that there are IRS TAX CONSEQUENCES when a debt is forgiven or settled (Over a certain Dollar amount) and worst of all the companies “specializing” in debt settlement are often taking loads of money up front from the debtor, before performing any work, which is often against FTC and State Law. The worst violation I have encountered thus far is the companies that promise to eliminate all unsecured debt (credit cards, medical bills) and don’t inform the client that the proceeding is merely a negotiation and not a legal one, that the creditor and credit card company and or debt collection agency do not have any obligation to talk to your settlement company, let alone actually settle the debt for less than is owed, and yet still many (not all) of these clandestine companies sign up thousands of unassuming hard working every day Americans on a daily basis.

I am not certain of the merits of debt settlement. For one, the debtors credit is already shot at that point and two the negotiation can be achieved and handled by the debtor themselves without having to pay out money to get rid of debt (Counter-productive in so many ways). It is not 債務重組  as if the settlement company has any formal expertise (perhaps former car salesmen as the exception) or need to follow any formal template or system. The solution to TRUE, LEGAL AND REAL debt relief is working through an attorney licensed and specializing in consumer debt relief.

With an experienced attorney one has the ability to view their financial hardships and debt in a total and comprehensive fashion and not in a bubble or vacuum of credit card debt alone. One is able to address and tackle the CAUSE and not the symptom and view and potentially address ALL DEBT both secured and unsecured including credit cards, medical bills, tax liens and mortgage dent and foreclosure if and when applicable. This allows for a plan of action that is comprehensive and does not give the debtor temporary relief or a false sense of security or small pieces of good news while ignoring the 800 pound gorilla sitting right next door! Perhaps the debts are so outrageous that the client is better suited for bankruptcy. Moreover, even if the debt is exclusive to credit cards alone and the client does not want to or cannot qualify for bankruptcy, an attorney can accomplish the same settlement if not with better and more effective results at far less than the cost of a debt settlement company.