![]() These non-profits can attempt to work with you and your creditors to develop a debt management plan that you can afford, and that can help get you out of debt. Guarantees that your unsecured debts can be paid off for pennies on the dollar.Īn alternative to a debt settlement company is a non-profit consumer credit counseling service.Tells you it can stop all debt collection calls and lawsuits or.Tells you to stop communicating with your creditors.Guarantees it can make your debt go away.Touts a "new government program" to bail out personal credit card debt.Represents that it can settle all of your debt for a promised percentage reduction.Charges any fees before it settles your debts.You can also view the Federal Trade Commission's page on " Coping with Debt " for more information. You can check with your state regulator or ask your state Attorney General if the company is required to be licensed to work in your state and, if so, whether it is. Some states require debt settlement companies to be licensed. You can also contact your state Attorney General and local consumer protection agency and they can tell you if any consumer complaints are on file about the firm you're considering doing business with. This can cause your original debt to increase.īefore you do business with any debt settlement company, search the CFPB’s Consumer Complaint Database. If you exceed your credit limit, additional fees and charges may apply. ![]() And if you stop making payments on a credit card, late fees and interest will be added to the debt each month. This can have a negative effect on your credit score and may result in the creditor or debt collector filing a lawsuit while you are collecting funds required for a settlement. Most debt settlement companies will ask you to stop paying your debts in order to get creditors to negotiate and in order to collect the funds required for a settlement. Warning: Debt settlement may well leave you deeper in debt than you were when you started. Using debt settlement services can have a negative impact on your credit scores and your ability to get credit in the future.Unless the debt settlement company settles all or most of your debts, the built-up penalties and fees on the unsettled debts may wipe out any savings the debt settlement company achieves on the debts it settles. ![]()
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