Watch Out For Debt Settlement Companies

You’ve probably seen the ads for the debt settlement companies on television. They claim to help you get out of debt easily. But according to CBS News, many of the so-called debt settlement companies are helping only themselves and exploiting consumers who are already facing financial difficulty. Illinois Lawyer General Lisa Madigan told CBS that the debt settlement industry specifically targets vulnerable consumers. “You would be more likely to settle your debt by buying a lottery ticket than by signing up with a debt settlement company,” said Madigan.

If you’re facing insurmountable debts in the Chicago area, speak first with an experienced Chicago bankruptcy lawyer. While bankruptcy is not the answer for everyone, the seasoned advice of a good bankruptcy lawyer can help you decide on the right option and protect you from being exploited.

Debt settlement companies operate by collecting monthly payments from their “clients” to create a “pool” of money. These companies then make offers to your creditors and use the “pool” money for settlement payments. Creditors do not have to accept the settlement offers, and debt settlement companies have no legal power whatever to stop creditors from suing you. There is always the possibility with a debt settlement company that none of your debts will settled at all. If you have a lot of creditors and substantial debts, bankruptcy may indeed be your best option.

Beware of any debt settlement company that wants to charge you a fee upfront or that “guarantees” to settle your debt for “pennies on the dollar.” Debt settlement companies simply cannot make such guarantees, and you could end up even further in debt. In the greater Chicago area, if your debts are becoming unpayable, get honest debt advice from an authority and discuss your options promptly with an experienced Chicago bankruptcy lawyer.