Debt settlement companies have been an option that consumers turn to when their personal debt becomes difficult to repay, which has been a problem many individuals have faced over the past months. Obviously, various types of personal debt can get out of hand if certain financial difficulties arise in an individual’s personal life, but there are questions as to whether these debt settlement companies do actually offer relief for the personal debt of consumers.
There are those who would argue against debt settlement companies for a variety of reasons. There are alternatives to dealing with a debt settlement company, which are often suggested by financial advisers before a consumer turns to one of these organizations. Keep in mind, there are instances where a consumer can greatly benefit from a debt settlement company and, as an alternative, there are credit counseling agencies which are nonprofit and may also be of assistance to those who are struggling to repay their debts.
However, some advisers often suggest that consumers work with their creditors personally before turning to a debt settlement organization. There are cases where consumers have simply hit a rough patch in their life and may need extra time to begin repaying their debts fully, or in some cases, consumers have simply benefited from a debt consolidation loan. While there are those who argue against consolidation loans as well, the underlying opposition to debt settlement companies and consolidation loans is cost.
An average debt settlement company will require that a consumer pay fees for their services and this could cause the overall costs that an individual must meet to rise. Also, some consumers may see their credit score drop while they are using a debt settlement company due to the fact that they are in a difficult financial situation.
Consumers who may be facing extreme difficulties, like the possibility of bankruptcy, may be willing to meet additional costs that come with debt settlement services, but individuals who may have a small amount of debt which is causing them problems or are early in their debt troubles could benefit from either contacting their creditors directly or seeking credit counseling from a nonprofit organization.
There are assistance articles available from the FTC which could be helpful for consumers who are unsure about their rights concerning debt settlement and debt collection. However, if a particular consumer does decide that a debt settlement company is necessary for their situation, it has also been suggested that consumers research the company they are planning to work with, as there are fraudulent organizations that look to take advantage of consumers dealing with difficult debt.
Again, there are reputable debt settlement companies that have assisted numerous consumers in erasing their personal debt, or simply getting a better handle on their debt situation, but consumers may also have alternatives to working with a debt settlement firm that could be more affordable and helpful for their situation.