When you first started struggling with debt, it’s likely that you picked up one of the many books on the subject. The New York Times Bestselling booklist often has titles authored by famous financial authorities like Suze Orman and Dave Ramsey. These money gurus also have websites, TV shows and radio shows. Their method of paying the bills is the same–strict debt diets and cutting up all the credit cards. And when it comes to debt settlement, you can bet that ‘trusted’ financial advisors in the media and other in resources, like MSN money, warn strongly against it.
Many Americans are a little leery of debt settlement because they have been hearing that debt settlement is bad from finanical advisors in the media. The debt coaches featured on Ophra’s “Debt Diet” series have echoed this same negative opinion, and Americans have grown up hearing that “if it sounds to good to be true, it is”.
And there’s no doubt about it, debt settlement sure does sound good. Debt settlement is a method for resolving debts by compromising with the lending company owed. The goal of debt settlement is to settle the debt for at least half of the amount owed. Debt settlement programs usually last between 12 to 36 months.
There is nothing illegal about debt settlement, whether you attempt it on your own, or you use a debt settlement company. Why then, are many popular financial gurus against it? This is most likely because all debt settlement companies were not created equal. The debt settlement industry is still quite new and its growing rapidly, as is consumer debt in America. The government hasn’t been able to keep up with the growth, and the industry is therefore lacking in regulation, meaning that some companies are unreputable. Money gurus in the media don’t endorse debt settlement because they don’t want to be held responsible if one of their followers takes their advice, but falls victim to a debt settlement scam.
Carefully choosing a debt settlement company is the key to avoiding a scam. Some red flags include no address or phone number listed on the website, or asking for large deposits of money upfront. When evaluationg a debt settlement company consumers should consider a couple of things. Professional debt settlement companies will hold memberships to the Better Business Bureau, local and national Chambers of Commerce and debt industry organizations. Representatives of a legitimate company will be more than willing to answer your questions and explain their debt settlement program to you.
One of the other reasons why money management advisors warn against debt settlement is because it isn’t the debt solution for everyone. Debt settlement is only for unsecured debts, and works best for debts in excess of $5000. Debt settlement is a viable solution for people who are struggling to make the monthly payments on their bills, or who are no longer able to do so.
Despite its often bad representation in the media, debt settlement is a great option for debt resolution, with many benefits. Not only is it a fast way to become debt free, but it can also enable you to move on with your life, work on raising your credit score and getting your finances back in order.