Are Debt Settlement Services Legit?

You’re in a lot of debt and you’re considering all your options; credit counseling, credit repair, bankruptcy, consolidation loans, etc. There are many ways to consider resolving consumer debt. Especially when you are being contacted each and every day by debt collection services, it can seem imperative that you make a decision immediately on how you will deal with all the debt. If you feel you must make a hasty decision, contact a debt collection attorney before doing so. Debt collectors are relying on you making a hasty decision. The Fair Debt Collections Act does govern debt collection agencies actions though, so don’t be in a rush; know your options.

Due to so much consumer debt currently, credit repair service companies are popping up all over the country. But how do you know if the company is legit or if they are just going to defraud you and put you further into debt?

BankRate.com states on their website regarding debt repair agencies, “These repair services, however, don't have any secret remedies for erasing bad credit. Neither you nor the credit repair service has the right to remove accurate and current information from your credit report. The bottom line is: Credit repair services can't do anything for you that you can't do for yourself, free.”

Further in the article, “Steve Baker, Director of the Federal Trade Commission in Chicago, says a prevailing myth about credit repair is that there are loopholes in the federal law that allows poor credit to be erased. It doesn't exist. He says that in the past four years the FTC has not seen a legitimate credit repair clinic.”

Financial laws are complicated and can vary from state to state. It is important to speak with a financial attorney who specializes in debt collection before deciding to use any credit repair services. Whocanisue.com can help you find an experienced attorney in your area to assist you with the complicated nuances of finance law and the decisions that will affect your financial life for some time.

That being said, they do go on to state that you may possibly find companies that are helpful and do provide a valuable service.

Finding Legit Credit Repair Services

• Do your homework
• Know your rights
• Get a contract

Do Your Home Work on Credit Repair Services
Contact the Better Business Bureau in your area and inquire about the company. Also contact the Attorney General’s Office or Federal Trade Commission to see if any complaints have been filed regarding the company you are considering using.

Know Your Rights
Become familiar with the Fair Debt Collections Act and how it impacts you and your debts.

Get a Contract from the Credit Repair Services
The contract that you get should specify the amount to be paid, what that fee covers (a detailed description of services to be performed), the length of time it will take, any guarantees offered, and finally the company’s business name, address, and phone number.

There are some dangers or warning signs that should have you avoiding a debt repair service or company.

Avoid credit repair services that:

• Ask you to pay an upfront fee. This is illegal debt collection and against the Credit Repair Organizations Act.
• Advise you to dispute all negative information within your credit report, even the accurate information.
• Promise to do things they can’t possibly do; for example remove bankruptcies before their time is up or judgments and liens. This simply cannot be done and will not happen.
• Offers you a new credit identity. This is a federal and state felony.

The best way to repair your credit is the old fashioned way. Start paying your debts down, little by little. There are some credit counseling agencies that can assist with debt reduction plans that could be worthwhile to investigate. Some resources are the National Foundation for Credit Counseling and the American Consumer Credit Counseling. Both sites will direct you to credit counselors who may be able to assist you with your debt.

Debt Collection Defense
However, sometimes your debt is just too high and bankruptcy would be a better option. If that is the case, you should seek an experienced debt collection attorney who can assist you with the process. It is very important to speak with an attorney who specializes in financial law and bankruptcy before making any hasty decisions.