The Risks in Working with Debt Settlement Companies

When debtors are worried about their ability to repay their creditors, they become susceptible to people who offer quick fixes. Some debt settlement companies are taking advantage of this by advertising misleading debt relief claims to debtors, such as: Being able to eliminate debts in months without bankruptcy; Stopping calls from debt collectors; Relieving their debts without affecting their credit ratings; and Allowing them to continue the same lifestyle with no consequence. Debt settlement companies tout their services as a win for all parties. The debtor relieves his or her debt, and the creditor receives some compensation for the debt. As a creditor, you know the downside of working with debt settlement companies. They ask debtors to send payments to them instead of you, delaying your reimbursement by years. Once the company has accumulated enough of the debtor’s money, it will come to you with a lower settlement offer than what you may have been…

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