Congress Takes Aim At Debt Settlement Scams.
Posted: May 10th, 2010 | Author: Joe | Filed under: Debt | Tags: Debt, debt settlement, Scam | 2 Comments »Two members of congress have introduced the “Debt Settlement Consumer Protection Act,” which seeks to reign in the fees charged by some debt settlement companies and require written disclosures of services before they are performed. The bill would also require debt settlement firms to offer the right to cancel for a full refund.
A typical debt settlement program requires the customer to make payments to the settlement company in exchange for services rendered by the company. Part of the payments are taken by the company to pay the various fees associated with the service, while the remainder is kept in an account administered by the settlement company.
Many disreputable debt settlement companies also require the customer to stop paying their creditors in a bid to make the lenders more willing to accept a lower overall payment, but this is a bad idea. Doing so will simply harm your credit score and could land you in court.
There is certainly a need for some form of regulation of the debt settlement industry. Since the recession began in 2008, the Council of Better Business Bureaus has reported more than 3,500 complaints about debt reduction companies. The complaints range from claiming that debt settlement programs don’t work to alleging that they led to even more debt, lawsuits and wage garnishments.
With all the sharks out there, it’s easy to be wary of debt settlement companies claiming to eliminate your debt for pennies on the dollar with no side effects to your credit, but that just isn’t possible. And perhaps worst of all is the fact that debt settlement companies charge you for what you can do yourself – for free!
The only thing congress aims at anymore is our wallets. I don’t have much confidence for them to do much of anything that will help me, like reduce how much of my money they take.
cool website btw.
The major thing that debt settlement and consulting companies over look is asset protection and wage garnishment protection. Wage garnishment is the result of loosing a debt collection lawsuit. Do not be a victim of wage and property garnishment. Get adequately protected. Just read this Article it explains what debt settlement/consulting companies don’t want you to know http://m.cnbc.com/us_news/37795330 Also, be careful in choosing the right company. Make sure they don’t just take your monthly payments into and escrow account and then forget about everything else that matters. There are companies available to help you settle your debts for pennies on the dollar all with out long drawn out monthly creditor payback plans.