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Tag Archives: debt consolidation companies

Beware of Debt Settlement Companies

Posted on September 7, 2010 by Elizabeth Rosar Chermack

When someone is considering filing bankruptcy, it is not uncommon for them to also be considering the use of a debt settlement company. These companies often advertise that they are a better alternative to bankruptcy, and that they will help you settle your debts for “pennies on the dollar.” A recent article on DailyFinance warns consumers of the possible perils of the use of debt settlement companies. I have had potential clients call me after paying large amounts of money upfront to debt settlement companies, only to find out that their debts have not been settled. This is a common problem; the DailyFinance article discusses how during public hearings regarding a change in FTC rules, the debt settlement company industry admitted that “as few as 30% of consumers ever achieve a settlement of any kind.”

On July 28, 2010, the FTC adopted a rule that prohibits firms from collecting upfront fees from consumers in debt settlement cases. Unfortunately, the new rule does not take effect until October 27, 2010, leaving unwary consumers open to potential abuse by debt settlement companies in the meantime.

Posted in Bankruptcy Law | Tags: bankruptcy alternatives, debt consolidation companies, debt settlement companies, FTC | Leave a comment |

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© Elizabeth Rosar Chermack, Attorney at Law. Disclaimer: The content of this website is provided for informational purposes only. Information you obtain from this website is not, nor is it intended to be, legal advice. You should consult an attorney for individualized advice. Use of this website does not create an attorney-client relationship. Elizabeth Rosar Chermack, Attorney at Law, is a designated debt relief agency by an Act of Congress and the President of the United States. She assists consumers seeking relief under the U.S. Bankruptcy Code.