If you are a Florida resident dealing with overwhelming debt, you may be looking for alternatives to filing for bankruptcy. You have likely received solicitations in the mail to sign up for a debt management plan that guarantees to consolidate your debts, lower your overall monthly payments, preserve your credit rating and provide you with some debt relief. As FindLaw.com warns, however, many advertised debt negotiation programs, credit repair companies and credit counselors actually are scams.
A legitimate debt management organization may be able to help you renegotiate the terms and/or interest rates of the debts you owe to your various creditors and may be able to provide you with other benefits as well. Illegitimate ones, on the other hand, often charge up-front fees, high monthly fees and/or a percentage of the debt savings you supposedly will receive. They also make promises that sound too good to be true and usually are. In addition, they can cause long term harm to your credit rating. At the very least, check out any company that solicits you with your local Better Business Bureau.
Many creditors will not negotiate or settle debts until your payments are several months overdue. By that time you are receiving harassing phone calls, paying late fees and/or a higher interest rate, and your credit rating already has been damaged.
A debt negotiation program need not be your last resort for solving your debt problems. Many people who are considering debt negotiation also look at bankruptcy options.
This information is provided for educational purposes, and should not be interpreted as legal advice.