For some consumers, filing for bankruptcy protection is the best option to get out of debt. One bankruptcy alternative that can be effective is debt settlement, which involves paying a debt settlement agency to negotiate with your creditors to reduce the total amount you must pay. But not all debt settlement companies are created equal. In fact, unless you know what to look out for, you could end up in more debt than when you started.
You may be wondering how to determine whether debt settlement is right for you. If you'd rather have legal advice on your next financial move, you may want to consider meeting with a local bankruptcy lawyer for a free case evaluation.
If your bankruptcy attorney suggests debt settlement, he or she may then be able to direct you to a trustworthy agency in your area. If, however, you decide that bankruptcy just isn't for you, we can help you get in touch with a debt settlement company.
Once you've selected a debt settlement agency to visit, be prepared to assess the situation with an open mind. Don't feel like you have to work with the first agency you find in the phone book - it may not offer you the best deal. When you first visit the agency, here are some "red flag" behaviors that should alert you that this company is probably not working for your best interest.
Walking out of a consultation may be difficult, especially if the sales representative is friendly. But remember: your goal is to eliminate your debt, not to make a salesperson's job easier. Take notes, ask for literature about the program, and get a second opinion before signing a contract.
Pleasing a representative by agreeing to a program may seem easier in the short term, but remember that you're there to help yourself - if the agency is legitimate, it should understand and encourage your desire to do your homework.
The above summary of debt settlement agencies is by no means all-inclusive and is not legal advice. For the latest information on debt settlement, speak to a bankruptcy attorney in your area.