There's No Fast, Easy Way to Get Out of Debt
October 21, 2012
Borrowers often seek a magic bullet to get out of debt, and many turn to debt settlement companies to help solve their problems. While many of these firms make a pitch to quickly resolve debt issues, the fine print can leave customers still paying, including fees, up to 75 percent of what they owe. According to the National Association of Consumer Bankruptcy Attorneys, only about one in 10 consumers participating in debt-settlement programs actually end up debt-free in the promised period of time. "These companies prey on the most desperate victims of the economic downturn," said Ed Boltz, the group's incoming president. "These particularly vulnerable consumers usually end up getting sued, stuck with outrageous fees, more deeply in debt, and far worse off in terms of their credit score." Boltz added that one of the biggest problems with such programs is that they encourage consumers to default on their debts.
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