Be Wary of Debt Settlers’ Claims

If you’re burdened with overwhelming financial obligations, you may be looking to a debt settlement company for relief. Unfortunately, according to Erica Sandberg, spokeswoman for Consumer Credit Counseling Services-SF, this may only lead to greater problems. A debt settlement company requires that you stop making payments to your creditors, and deposit money into a specially designated account instead. Once you have built-up a certain amount of cash, the company will offer a lump-sum payment to one of your creditors. After one account is settled, they will do the same with the next.

Most debt settlement companies over-promise what they can do for you. They may claim you will be out of financial trouble quickly (not true), and minimize negative credit reports or possible lawsuits. If you need help digging out of debt, choose a non-profit credit counseling agency that can help you develop a realistic and achievable debt repayment plan.