Debt Settlement Companies Defend Themselves - So Is Debt Settlement A Legitimate Industry?
Online, May 4, 2010 (Newswire.com) - Recent congressional hearings into the debt settlement industry have fueled the debate of whether or not debt settlement is a legitimate industry. Critics of debt settlement argue that these companies charge too much upfront fees and the consumer has no guarantee that the debts will ultimately be settled. Representatives form the debt settlement industry acknowledge that there are some shady and unethical companies that exist however to paint the whole industry in a negative light in simply unfair. So is debt settlement a legitimate way for consumers to eliminate unsecured debt ?
Debt settlement companies settled over $1 billion in unsecured debts in 2009 alone. This resulted in approximately $400 million being collected for creditors and $600 million being eliminated off the books for debt ridden consumers. Debt settlement negotiators are basically the middle men that try to find a common ground between the creditor and the debtor. Consumers are able to get rid of some of their unsecured debts while creditors are able to collect delinquent funds that they most likely would have never collected had it not been for the debt settlement process.
Critics of debt settlement companies will argue that these companies charge large upfront fees and often times the debt does not ever get settled. The Association Of Settlement Companies (TASC), the debt settlement industry's regulatory body, acknowledged that the success rate of debt settlement is approximately 35%. This might not seem like a high percentage but it is much higher than credit counseling. This 35% completion rate is for the debt settlement industry as a whole. Many consumers simply drop out before the program is completed. For those that stick with the debt settlement program , typically 2-4 years, the success rate is likely much higher than 35%.
Debt settlement is not a magic bullet to get out of debt. There are negative consequences including a negative effect on credit scores. If a debt settlement company tells a consumer that their credit score will not be affected they are not being truthful and should be avoided at all costs. Unfortunately there are many companies out there that promise things that they simply cannot follow through on and these inexperienced and unethical companies have given the entire industry a black eye.
If a consumer is over $10k in unsecured debt and is currently experiencing a financial hardship then debt settlement can be a viable option to eliminate debt and avoid bankruptcy. As long as they understand the risk and know how to locate a legitimate debt settlement company then debt settlement can make financial sense. Consumers who enter into a debt settlement program must have enough patience to stick with the program for its entire duration, typically 2-4 years, if they want to successfully settle their debts.
To locate legitimate debt settlement companies that have proven themselves in successfully settling consumer debts check out the following link:
Legitimate Debt Settlement Companies
Or Call 877-853-6466 for Free Debt Help
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