It's Time to Win the Debt Game

With the national debt levels reaching high points each day and the loss of jobs that is occurring across the country, Americans are finding it harder and harder to pay their debt obligations. There are many offered options to the debt issues that plague so many. These include credit counseling, consolidation, and debt management programs. All have their pluses and minuses but may leave many with a new program that is also unaffordable.

When you lose a job or calamity strikes, often even these new debt structures can be unreasonable and let’s face it, if there is no dollar, there is no dollar. Many are investigating debt settlement as a possible solution, the concept of negotiating to be pay less than actually owed and calling the account paid. How is the settlement industry look? Is it worth doing or just a “scam”?

In a challenged economy such as this, industries such as debt settlement thrive. With any growth, of course, come many companies, good and bad. Settlement as a concept is practiced by large companies as well as individuals. Just today, on Fox Business, an article was found speaking of the settlement a uranium mining company is negotiating. On the same note, the number of issues in the industry increases everyday with several announcements of late that companies are being sued for misrepresenting in advertising, collecting fees for services not performed, and more. This does not, however, signify that settlement is a poor option, only that one should be cautious in understanding the process and the company with whom one works.

MSNBC recently aired a series of videos and articles on the “next big American crisis…” of debt and the tough situations people are finding themselves in! Many look to bankruptcy and for some, this is the only place turn. However, exploring options such as settlement or any other alternative is often the most financially responsible thing to be done as we take control of our own situation and not turn it all over to a court system to decide our fate. These other solutions often offer a better situation not only for the consumer but the banks as well, even settlement can be better for banks than Bankruptcy.

Some sites offer free advice, including simple news sites. Again, msnbc.com had several articles offering good general advice. One article offered tips on eliminating harassing debt collection calls while another has many references to sites that will help you understand your rights when it comes to debt. This is probably the biggest weakness that us consumers have in the game of debt, we don’t even know our own rights! As a first step in overcoming debt, we must educate ourselves on debt, how it works, what laws and rights exist around it, and what options exist. This does not mean we go back to school but just some loose research from trusted websites can be sufficient.

If settlement is the option for you, there are some points to remember or think about when approaching a settlement company:

* Look for references, examples, etc. that can demonstrate their ability to perform.

* Your credit WILL be damaged as settlement usually requires you to stop making payments. If the company does not explain this, beware. Typically when you make a payment to the company, it is NOT going to your creditors but to an “escrow” account where it accumulates in order to settle later on.

* Lawsuit is a risk and ought to be planned for with a contingency strategy. When you break a contract (non-payment), this will always be a risk. It doesn’t mean you cannot plan for it and minimize the risk though. Again, be careful if they say otherwise.

* You can look at the Better Business Bureau, only understand that debt settlement as an industry is considered “bad” by the BBB and few, if any, actual settlement companies have a high rating. Instead, look for complaint history and how they handled them (responses, etc.). The highest rating I’ve seen was a D+ (settlement, not counseling or other industries).

* Choose an option that allows you to stay involved in order to control your own situation and minimize “non-performance” of services purchased.

As debt levels rise, the need for financial responsibility only increases and researching solutions is as necessary now as ever. Don’t be insane (I define insanity as doing the same thing while expecting a different result). If you are in financial trouble, it is time to make changes as the problems will not solve themselves. Don’t be fooled by debt collectors, you do have rights and in an industry such as debt collection, your rights become all the more important to avoid corrupt manipulation. It’s time to take the steps to winning the debt game.

Written by PlanB Consultants LLC
blog.freedomfromcreditors.com

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