Debt settlement is rapidly becoming settling for being in debt when you listen to the wrong people.
If you would have met with as many clients as I have over the 33 years we have been around at Steidl and Steinberg who have had their financial lives ruined by debt settlement companies, you would be shaking your head.
The reason for this is explained very well in a recent edition of the New York Times Business Day, and makes reference to a report from a true nonprofit organization, the Center for Responsible Lending. There are some very frightening passages. Let me highlight a few of the problems found.
1. The client is told to stop making payments on the debt. But this substantially increases the amount owed, as interest, fees and costs are added.
2. Some companies you owe won’t negotiate with the debt settlement companies, thus leaving you liable for a lawsuit, a common problem with those we represent.
3. You will most likely owe income taxes on the amount saved, also adding to your costs.
4. The debt settlement companies do not generally work with medical and tax debt.
These are just a few reasons why you should contact us before you leap into something that sounds too good to be true, and this includes the companies that say they are not debt settlement or debt negotiation companies. Hint: they usually are.