![]() You may have to pay advance fees or monthly fees. You could be left with more debt and no change to your credit score. You'll have to keep making your payments on any other debts you owe. This service doesn't help eliminate any of your other debts. ![]() Be aware this type of loan usually has a high interest rate. You may end up making regular payments to the company to repay the loan. The company will tell you the loan amount will cover its services or programs. When you sign up for this type of loan, you may never actually receive any money. Some companies also offer you a loan suggesting it will help repair your credit score. Only a licensed insolvency trustee can offer you these 2 options This is part of consumer proposals and bankruptcies. handle government-regulated proceedings that release you from debt.offer legal protection from creditors’ actions like seizing assets.stop your creditors from trying to recover the money you owe in court.prevent creditors and collection agencies from seizing your salary or taking money from your bank account.ensure your creditors will always agree to participate in debt settlement negotiations.guarantee to reduce your debts by a large percentage.They may promote their services in a misleading way. Unrealistic promisesīe aware that some debt settlement companies may make unrealistic promises about what they can provide. If you get a call, don't feel pressured to agree to something right away. High-pressure sales practices create a difficult environment to make clear decisions. Some debt settlement companies offer their services through aggressive telemarketing calls. What to watch out for when considering a debt settlement companyīe aware that some debt settlement companies may do the following. This allows you to confirm that your payments are being received. Before you sign, make sure the debt settlement company agrees to inform you of all payments they make to your creditors. They may ask you to sign a power of attorney to give them this ability. Be aware that a debt settlement company may still charge you fees even if your creditors refuse the offer. They’re usually for-profit businesses that make money from the fees they charge their clients.ĭebt settlement companies don't always provide credit counselling and money management advice.Ī debt settlement company may offer to handle all communications with your creditors. Your creditors may not agree to lower the amount of your debt or work with the debt settlement company. There are many different names for debt settlement, including:Ĭreditors don't have to negotiate with a debt settlement company. ![]() Some credit counselling agencies may also offer this service. The debt settlement company will then pay your creditors. If your creditors agree to the offer, you must pay your debt settlement company. This amount is often lower than your total debt. A debt settlement company negotiates with your creditors and offers them an amount of money to eliminate your debt.
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