Anybody with debt knows all too well that there are plenty of debt settlement companies who want your business. Some of these companies could be helpful, depending on your circumstances. However, the debt settlement industry is fraught with scammers and fraud. So, beware. As a bankruptcy lawyer, I suggest you speak to somebody like me before engaging with a debt settlement company.
Well, first read the following statement directly from the Federal Trade Commission’s website. Before you do business with any debt relief service, check it out with your state Attorney General and local consumer protection agency. In Florida, you can contact the Attorney General’s office through this link.
Also, if you decide to go down the debt settlement path, consider the following tips:
- Make sure the company has a license to do business in Florida.
- Find out the company’s services, fees, and processes. Get these details in writing.
- Do not pay any fees upfront or make “voluntary contributions.”
- Understand the risks. For example, how this service will impact your credit report.
- Look out for “guarantees.”
- Do not prematurely send any personal or financial information.
- Do not sign a Debt Management Plan, aka DMP, without a complete understanding of it.
The Attorney Perspective
Again, there are reputable debt consolidation and debt settlement companies out there. That said, I still recommend that you first speak with an experienced bankruptcy lawyer. There are several reasons besides the potential dangers listed above.
- The experience of an attorney can be an effective negotiating tool. Plus, the lawyer knows how to use the power of the legal system should it become a necessity.
- Instead of paying the debt settlement company, you may be able to use that money to pay off creditors. In other words, paying off your debt.
- If things do not work out, you may be signing away future legal rights.
Please call me if you have any questions about this blog. I am happy to discuss your situation and talk you through the options.