Beware of Debt Settlement Companies - They Can Cost You More Than You Owe

Debt settlement companies can cost you more than you owe your creditors. The basic strategy of a Debt Settlement company is to tell the client to stop paying their unsecured bills (like credit cards) and open a special account and fund it with what they normally would pay their creditors. Over time this builds a “war chest” that the Debt Settlement company can use to negotiate a settlement of the debt often promised to be 40 cents on the dollar. Reducing your debt by 60% can be very appealing particularly to people who have no other option but bankruptcy. (more…)