A reader that glances at my blog might mistakenly conclude that I recommend consumers pursue a debt settlement strategy far more often than I would any other. If that is not the case, then why does the topic of debt settlement, at least thus far, clearly dominate much of the content on this blog? Simple. The debt settlement Industry, by a large margin, is harming many more consumers than all of the other “debt reduction strategies” combined.
As an advocate for consumers, it is my job to stick a finger in the flute of the Pied Piper promises that many Debt Settlement companies are playing. My articles help to educate consumers about the realities of the debt settlement approach and the lengths at which many companies will go to deceive and enroll consumers into programs that are counter intuitive to their best financial interests.
There are numerous ways Debt Settlement companies can harm consumers. In my opinion, most of the damage is done because of two specific reasons.
1. Debt settlement companies that will enroll any client they can collect a fee from, regardless of the financial viability of a debt settlement strategy given the client’s circumstances.
2. Debt settlement companies, that charge most, or all of their fees before successfully settling their client’s debts.
If you want to know whether or not a Debt Settlement Company will put your best financial interests above their profits, you can start by looking at their fee structure. If they don’t tie their fees to your success, and they are asking you to pay all of their fees before they perform a majority of the services that they enthusiastically promise during the initial sales pitch, then they “couldn’t care less” about whether or not they can help you. All they care about is whether or not they can collect a fee from you until you realize what is going on and put a stop to it.
Debt settlement can be a good option to quickly get out of debt if your financial circumstances warrant an aggressive approach, however it is certainly not the best option in all situations. Since most debt settlement companies charge most or all of their fees prior to settling their client’s debts, than in my humble opinion, most settlement companies should be avoided by consumers.
As I have time I plan to write more articles that branch into other areas of debt reduction and personal finance. However, at this point in time I feel that with my limited writing schedule, consumers are best served by a continued focus on the industry that is causing the most damage to the very people it purports to help.
Consumer Rules of Thumb
1. Research all options available before making any decisions.
2. Don’t let any sales person rush you into a decision, especially when you don’t fully understand the option.
3. A Free Consultation is typically a euphemism for Free Sales Pitch (doesn’t make it necessarily bad, just be aware).
4. Don’t listen to any sales person that recommends a program before fully understanding your financial circumstances and goals.
As always, if you would like to contribute your thoughts, and have something to add to the article, please do so by Commenting.
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