| With burst of the housing bubble and subsequent | | | | her savings account (A red flag in all cases) and |
| worldwide recession, Americans are facing more | | | | deposited $400 per month into an account |
| credit card debt than ever before. Despite many | | | | toward her settlement. |
| consumers' best efforts, eliminating thousands of | | | | However, when debt collectors continued to |
| dollars in unsecured credit card debt is extremely | | | | harass her, she realized the firm had never |
| difficult to accomplish alone, more often than not | | | | contacted her creditors in the first place. |
| requiring extreme financial discipline and an | | | | Five years of battling with the company, while |
| impressive savings account. This situation has | | | | continually depositing money into her savings |
| opened the door for bogus debt settlement | | | | account, caused her to wonder if she would ever |
| companies who prey on these misguided | | | | get her debt under control. She realized she had |
| consumers. | | | | been swindled when the Attorney General's office |
| Debt Settlement companies burst onto the scene | | | | called to inform her of the imprisonment of the |
| in 2003, offering an alternative to traditional debt | | | | firm's leaders. Unfortunately, she never got her |
| consolidation firms. These companies offered the | | | | money back and has recently filed for bankruptcy. |
| ability to bargain with banks and collection agencies | | | | Luckily, this situation is still the exception to the |
| to forgive large amounts of what was owed, | | | | rule, as many of these debt settlement |
| enabling the consumer to make a down payment, | | | | companies offer legitimate financial services and |
| and then pay monthly until the debt was paid off. | | | | the opportunity to become debt-free. Still, due to |
| This was different than the traditional programs | | | | a lack of governmental regulation, the predatory |
| which often wrought lower interest rates and | | | | firms still lurk, waiting for the perfectly desperate |
| fee's, but did nothing to reduce the total amount | | | | person to come along. |
| due. | | | | Protect yourself. Do your research on the firm |
| This atmosphere presents a fertile breeding | | | | with whom you are planning to do business. Ask |
| ground for predatory companies. | | | | friends and family, visit their website, and most |
| Consider the case of a 65-year old woman in | | | | importantly, check with the Better Business |
| Maryland who asked not to be identified. She | | | | Bureau. Debt settlement companies can be a |
| signed up with a company who promised to help | | | | wonderful tool in the fight against credit card debt, |
| relieve her of the $10,000 in credit card debt she | | | | just make sure you choose the right one. |
| had accumulated. She gave the firm full access to | | | | |