Debt Settlement is a scam.
It is a great scam because you immediately believe the basic false premise of Debt Settlement programs — that your creditors are eager to settle your debts!!! NO THEY ARE NOT!!! They want all their money and they will harass, sue, and then garnish and sieze everything you earn or own until they get it.
Most debt settlement companies take the all or most of the first monies you pay in as their fee. While you are paying the debt settlement company, you are not paying your creditors and they start to sue you. You have no settlement money built up even if one of the creditors were willing to settle because its all going to fees for those Wizards of Debt Settlement you hired.
And don’t forget that when you settle those debts for 70%, the other 30% is taxable as they send you a 1099 for income from debt forgiveness. OUCH! Debt relief in bankruptcy is not taxable. It is in the Internal Revenue Code.
The alternative Credit Counseling Companies are sometimes subsidized or supported by the credit card companies. But they do offer a “friendly” way to resolve the amount owed on a lesser interest rate or the like. The problem is that there are many hundreds of creditors and most of them don’t co-operate with the credit counseling companies. So you couldn’t pay your creditors, so how are you going to ever pay the credit counselor and the creditors in those payments that go on and on and on. Most people give up on Debt Settlement and on Credit Counseling in about six months after starting one of these programs. Save yourself the six months and the money you would make in payments.
Get a accurate professional review and opinion about your options from San Jose Bankruptcy Attorney David A. Boone before you blindly start throwing money at desperate solutions. The firm is the oldest and largest bankruptcy attorney firm serving San Jose, Cupertino, Sunnyvale, Santa Clara, Mountain View, Los Gatos, Campbell, Milpitas, Morgan Hill, Gilroy, San Martin, Palo Alto, Los Altos, Saratoga, Santa Cruz, Watsonville, Aptos, and the unincorporated areas all over Santa Clara County, Santa Cruz County, and San Benito County.