A few months ago, someone came to me to talk about his debt problems. This nice gentleman was trying to start a business and he took more than 100k in debt to get it going thinking that soon enough he was going to be successful and he was going to be able to pay it all off easily. Well, that didn’t happen and he found himself trying to find someone who would act as a debt counselor to him. After searching for a while he found a company that asked him to put down $1500 dollars a month and that they would then pay off his debt within 3 to 4 years. He was already paying close to $2000 in minimum payments and at that rate he would be paying his debt off for the next twenty years.
Feeling that it was a good option, he went for it. The agreement they made with a contract that was nice and everything called up for a not too shabby fee of $15k or about 15 percent of his total debt. As the company was affirming to him that he would save up to $50k if he did this, he went ahead and signed up for this debt settlement program. In the end, what he was paying up front or 10 months of fifteen hundred dollar payments up front, this man was facing two lawsuits from some of his creditors. As he had paid for ten months but really not made much of a lump sum to face his creditors and settle those debts (since the first $18k he paid, only 3k went towards funding his settlement account), he was forced to file for bankruptcy and he was out of his 15k which was spent on this debt settlement company’s fees.
Bottom Line: If you have a financial counselor that asks to be paid up front, prior to doing any work, run. This person or company is almost certainly a scam.
It is always better to do your due dilligence in everything but your money is one of the most important things in your life and you should always make sure that you find the right company to settle your debts for you. You could loose a lot by going with solutions that don’t really want your best interests. Make your choice right and you could settle your debts for pennies on the dollar. Do it wrong and you could be loosing your shirt in the process.
Don’t take the task of finding your debt settlement company lightly. This is one of the most important aspects of your financial life and it should be taken seriously. Beware of illegitimate debt settlement companies out there and get your financial life back on track.
In your process of finding for a good Debt Reduction Company go to our Debt Negotiation website to find out how to choose the right man for the job.
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