Debt Settlement Pros and Cons. This article may be a bit satirical and exaggerated, but any consumer that has found themselves in the unfortunate situation to have to get some straight answers about the different debt relief options available can certainly appreciate how this article closely mimics reality.
Ask a Credit Counselor and a Debt Settlement Representative about the pros and cons of debt settlement. What are you supposed to think when they each provide answers that are basically 180 degrees apart? Compare them point for point. It’s only funny cause it is true.
Debt Settlement Pros and Cons
1. Credit is completely destroyed
2. You will be sued
3. Creditors will call you at all hours of the day and night
4. Creditors will call your family, friends, neighbors, boss, high school sweetheart, 3rd grade teacher and even your mailman
5. All debt settlement companies are scams
6. Settlement is worse than bankruptcy
7. Settlement never works
8. The IRS will hunt you down after you settle a debt
9. Debt Settlement isn’t ethical
10. Fees that would make a pay day lender jealous
11. They pretend to offer you a low monthly payment, but they are not giving any of that money to your creditors
12. Since the creditors aren’t getting paid for many years, they will sue you
13. In the end settlement will cost you more than the entire debt you have now
14. Settlement companies will bleed you dry for fees and then force you into bankruptcy
15. Don’t Call a Debt Settlement Representative because they will just lie to you to make a sale
Debt Settlement Representative:
1. Credit will go slightly negative but can be fixed very quickly
2. We protect you from lawsuits
3. We stop all phone calls and none of your creditors will bother you
4. If a creditor calls anyone or steps out of line we will sue them for an FDCPA violation and you get 1000 dollars
5. We have settled millions of dollars in debt for our clients and are endorsed by every single impressive logo we could find on the web
6. Settlement is a much better alternative to bankruptcy
7. All creditors settle debts
8. You may have to pay a little bit of tax on the forgiven debt, but you can just ask for a waiver on that
9. Debt settlement is a very ethical solution because you pay back what you can afford
10. Our fees are very low and rolled into your easy monthly payment for your convenience of course
11. We will cut your monthly payments in half and provide you the most relief
12. We offer easy monthly payments to pay back only half your debt in 3 to 5 years
13. We will save you a gazillian dollars
14. We are your only option to avoid bankruptcy
15. Don’t call a credit counselor because they will just lie to you to make a sale
Is it any wonder that consumers are simply lost when it comes to getting consistent information about resolving debt issues? The main problem in the debt relief industry or practically any industry for that matter, is that advice tends to “lean toward the green”. Meaning, advice tends to follow the money.
If the person offering advice is getting paid to sell Credit Counseling, they are not likely going to speak highly of debt settlement and vice versa. I am not saying that many of these credit counselors and debt settlement representatives don’t want to honestly help their clients, but there is just an inherent bias that cannot be ruled out.
Watching the credit counseling and debt settlement industries going at each other is like the Hatfields and McCoys. They just flat out don’t like each other and that industry culture permeates into their consumer advice to the detriment of their clients unfortunately.
So, with that being said, what are the debt settlement pros and cons? Well, the reality is that it is a mixture of the above. How much of one vs the other will actually depend on a consumers specific situation. There is no stand alone better solution. For some, a credit counseling approach offers the most benefit, for others a settlement approach will make sense, and for others still, neither one will work.
So how can you get straight answers about your debt relief options? Start by talking to someone that gets paid to give you those straight answers you are looking for. Not to toot my own horn or anything, but TOOT TOOT!
If you would instead prefer to talk to a respectable debt settlement company directly, there are a few companies that I have confidence in and have a long track record of doing right by consumers. One such company is Donaldson Williams. With over a 7 year track record, an A rating from the BBB, and a No Fee until they settle your debt policy, they are one of the few companies I can recommend.
*This article was a featured story at How To Get Out Of Debt.