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Should you use debt settlement companies?

On Behalf of | Aug 11, 2017 | Avoiding Bankruptcy

If you are having trouble with debt, you may consider using a debt settlement company in Florida. If you do your homework, though, you will see they can be a pretty dangerous choice. At Kingcade & Garcia PA, we want you to explore your options, but debt settlement companies are almost always a bad idea.

It may be appealing to settle your debt instead of filing for bankruptcy, but it is not usually the best answer simply due to how these debt settlement companies work. They usually will give you some bad advice along with charging you fees that add to your debt. It is not a real money-saving tactic that will get you debt free. In fact, 96 percent of the time, these tactics fail.

The FTC notes these programs are designed by for-profit companies who are looking to make money off your debt problems. They charge you fees for the service while also telling you to stop making debt payments. Typically, you will be told to save back money from each pay to put in an account. Once you save enough money, you pay off a debt. This does not usually work too great because credit companies will not sit around waiting for you to get all the money saved up.

In addition, such companies usually work on your smallest debts first. In the meantime, your larger debts are growing even larger with interest charges adding up at astronomical amounts. Add all that interest you are accumulating to the fees and you do not really end up saving much. To learn more about what your options are when it comes to getting rid of debt, please visit our website.


Kingcade & Garcia | A Miami Law Firm