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Can Debt Settlement Companies Really Get You Out Of Debt?


If you had a dime for every time you saw an advertisement by someone promising to get you out of debt, you would have become debt-free a long time ago and stayed that way.  It is easy enough to spot the ads that are outright scams, because they promise solutions that are too good to be true, but what about the companies that offer to negotiate with creditors on your behalf in order to settle your debts?  Settling debts through a third party can make some debts go away, but whether this is the best option for you depends on the main causes of your debt problems and whether there is a simpler or less expensive solution to them.  Some of the services that commercially available debt settlement companies provide are things that you can do on your own.  In other cases, the debts that debt settlement companies can resolve are not the ones causing the biggest financial obstacles, so debt settlement is only a Band-Aid solution.  To find out whether a consumer debt relief company can help you or whether you need a more comprehensive solution, contact a Boca Raton debt lawyer.

Can You Just Pay Someone to Settle Your Debts?

Consumer debt settlement companies such as Accredited Debt Relief collect a one-time fee from consumers and, in return, they negotiate with creditors to settle the consumer’s debts for approximately half the face value of the debt amount.  The consumer then deposits money in a designated debt repayment account each month, and the creditors collect the installments until the debts are repaid.

This can be an easy way to get out of debt, but only if you have a very specific kind of debt problem and certain means of solving it.  For example, Accredited Debt Relief only settles unsecured debts.  An unsecured debt is one that does not have an asset attached to it as collateral.  Therefore, medical bills and credit card debt are unsecured debts, but home mortgage loans and car loans are secured debts.  Accredited Debt Relief and companies like it also cannot settle federal student loans, because federal student loans have their own set of rules.  Another limitation of these debt settlement services is that they can only help you if you have enough income to keep up with the payments on the debts being settled.  It is like an amateur version of chapter 13 bankruptcy.

If you have secured debts but can’t stand to lose the assets attached to them, debt settlement might free up funds to keep making payments on your house and car.  If settling your unsecured debts isn’t enough, then a debt consolidation loan might enable you to pay off your smaller debts and keep up with payments on the other.  If that is not enough, then chapter 7 bankruptcy will let you keep your most necessary assets and discharge many of your unsecured debts.

Contact a South Florida Debt Lawyer About Settling Your Debts or Otherwise Making Them Go Away

A South Florida debt lawyer can help you settle your debts by negotiating directly with creditors instead of going through a third-party company.  Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.



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