The stress and anxiety of falling into debt can overwhelm a person’s life both financially and emotionally. The deeper the debt, the deeper the depression which makes logical or rational thought more impulsive and often desperate.
Consumer debt was approaching $14 trillion after the second quarter of 2019, according to the New York Federal Reserve. As Americans try to scratch and claw their way out of debt, many often seek help with a debt related lawsuit or legal issue in the form of a negotiated debt settlement. The old adage, however, holds true, if it sounds too good to be true, then it probably is and, without the professional guidance of debt lawsuit specialist like Boca Raton’s GM Law Firm, your debt will almost always get much worse before it ever gets better.
“There are many industry known scams associated with debt settlement companies, and it’s important to speak with a debt lawsuit specialist to understand the sneaky and subtle ways these companies can operate,” explains Chantel Grant, a debt lawsuit specialist and Senior Partner at the GM Law Firm.
It’s also important to know your debt legal rights when listening to supposed settlement options provided by companies appearing to want to help. Even if they threaten you with what sounds like a monolithic type of lawsuit pending, you still reserve many rights established by the federal government to protect consumers in the intimidating face of a debt lawsuit.
The Fair Debt Collection Practices Act is just one such consumer protection bill enacted solely to prevent sneaky and harassing policies against those faced with seemingly insurmountable debt. Consult with a debt legal specialist about the many ways to defend and protect yourself. And it’s particularly important to seek legal advice before jumping into what may sound like a “too good to be true” debt settlement scenario.
The Risks of Debt Settlement
Debt settlement programs typically are offered by for-profit companies who act as a sort of intermediary between you and the creditor you owe. This sort of mediator will dangle the word “settlement” by giving the impression that you can actually pay less than what you owe. However, the settlement will sometimes be required to be paid at once in one, big sum as opposed to payments with interest that you have already been paying. Chances are, if you are in debt, you may not have that much equity sitting in the bank so you need to find professional legal help with your debt lawsuit.
In other cases, the program requires that you deposit a monthly sum into a special savings account for 36 months or more until the debt is paid off. However, you have to be conscious of your current income and savings to assure you can make these monthly payments consistently or fear additional penalties.
In addition, since you are no longer paying your creditor directly, your already fragile credit score could take an additional negative hit, especially if you start accruing late fee penalties by not meeting your monthly agreement. In many cases, help from a qualified attorney for a debt lawsuit will save money in the long run and also help protect your current credit score.
Beware of Debt Settlement Scams
The debt industry is no different than what we saw with the mortgage companies a few years back when it comes to ethics and transparency. Some companies deceive consumers by making false promises that they can settle your debt for, say, 50 percent of what is actually owed. They may even ask to collect a fee for the promise of shrinking the debtor’s payoff. Others will fail to explain the risks of trying to settle debt in the form of continued harassment by the creditor even after debt has been allegedly settled or the negative impact on your credit score.
In some cases, your debt may still exist even after it appears the debt has been settled. In such a drastic scenario, you’ll still be on the hook for the debt and may still have to fight a damaging debt lawsuit.
All these factors need to be disclosed before you proceed and this is where the money spent on professional legal expertise in the area of debt will save you valuable time and money. Debt lawsuits can require help from organizations like GM Law Firm who will fight for debt defense and debt dismissal without the scams offered by a so-called debt settlement firm.