This week, we have been discussing an Indiana debt management company that closed, leaving its customers to fend off creditors on their own while contemplating bankruptcy.
Debt management companies like Debt Doctors, the company in Lafayette, Ind., often have poor reputations when it comes to customer service and are known to charge hidden fees.
If you’re considering a debt management or settlement company, make sure you do your research before investing. Often, these companies market themselves as a quick way to end collection attempts through settlement or negotiation. In order to work, debt settlement and management companies have you stop making monthly payments on debts, while setting aside your money to make settlement offers to creditors. This may work for some people, but don’t be surprised if you join a program that has you set aside money with a third party bank that charges substantial fees.
Debt management and settlement programs have a negative impact on your credit scores and credit ratings, and they often promise to repair your credit history after your debts are settled. However, most of these companies do not have the authority to make changes to your credit information—all they have the power to do is request that negative information be removed from your credit history, which is something you can do on your own.
Most debt management and settlement companies are for profit, so they charge fees for their services. In 2009, 11 debt settlement companies settled with the Colorado Attorney General for failing to disclose fees and being dishonest in advertising to customers.
We talked about the benefits of bankruptcy on Wednesday. Taking the time to talk to an experience attorney about your financial situation is a small inconvenience compared to the negatives that could come with choosing the wrong debt management or debt settlement program.
If you have questions regarding bankruptcy, talk to our attorney. If your financial situation is a problem, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.