09 Mar Debt Settlement Plans Exposed
Smart Money offers Five Reasons to Avoid Debt-Settlement Firms. The article is worth reading in it’s entirety if you are considering various options, and it does a fairly good job of explaining the difference between debt settlement plans and debt management plans. To me, the most striking observation was on the subject of attrition, or success rate of such plans:
If you decide to go the debt-settlement route, the odds are stacked against you. While debt-settlement companies don’t release their completion rates, a look into the records of one organization — the National Consumer Council, which the Federal Trade Commission sued for misleading advertising and shut down in 2004 — paints a grim picture. Of the company’s 44,844 clients, only 638 (a meager 1.4%) successfully completed the debt-settlement program. Nearly half (43%) canceled after paying an average $1,780 in fees.
Add to that the occasional scammer masquerading as a legitimate debt settlement firm, and the picture looks even worse.
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