Friday, April 23, 2010

Debt Settlement Companies Finally Receiving Scrutiny

Debt Settlement Companies under Scrutiny

ABC News is reporting that the Government Accountability Office has conducted a study of 20 companies that promise to settle your debt at a huge discount. The GAO found that the debt settlement industry is rife with fraud and deceptive practices.

I've seen a huge increase in these debt settlement or debt management companies in the past year. They sure seem like ripoffs to me. You pay them 10-15 of your debt before anything accumulates towards the pool for settlement. In the meantime, your accounts are going way in default, and your credit is all shot to hell. Virtually all of these consumers would be better off in bankruptcy, usually Chapter 13 plans.

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