CALL NOW!
FREE PHONE/VIRTUAL CONSULTATION

Why Debt Settlement Doesn’t Work

Debt Settlement Attorney Pasco, St Petersburg, Tampa Florida.What is Debt Settlement?

Debt settlement can seem like a very appealing option when you are struggling to meet your financial obligations. It’s not as drastic as bankruptcy and it lets you off the hook for the insurmountable amount you owe.

It’s as if it’s too good to be true.

And this is because it often is just that. Rarely do debt settlement companies deliver on their promises and you’re stuck in a worse position than if you’d done nothing or if you’d filed for bankruptcy.

Debt Settlement Companies Promise Relief that Never Comes

Unfortunately, there are far too many people out there scared of what comes next when they are facing financial problems. They get calls daily from aggressive debt collectors, they might be served with a lawsuit, and their credit is an abysmal mess. Wage garnishment or levied bank accounts or foreclosure could be in their future.

Then in walks a debt settlement company offering to make it all better when in reality, their problems are only going to get worse.

The truth is that most debt settlement opportunities fail to offer a debt-free life and they result in credit that is damaged more than it would have been in bankruptcy. In many cases, the person dealing with debt problems ends up filing for bankruptcy anyway, but from a much worse place than had they opted for that in the first place. Some aren’t even able to afford bankruptcy because of what debt settlement costs them.

So Why Do People See Debt Settlement as Such an Appealing Option When It’s Most Often a Mistake? There Are Several Reasons:

  • It relieves them of the emotional burden tied to debt. You’re paying someone to take care of your debt issues for you so you don’t need to worry about them any more (except you will need to worry and your worries will be even worse).
  • It offers a “less frightening option” to those who are afraid of bankruptcy. Filing for bankruptcy is seen as a last resort and comes with a great deal of perceived judgment. So-called financial experts badmouth bankruptcy and many people don’t view it as a viable option for fixing a problem, so they choose debt settlement instead.
  • Debt settlement companies make it seem alluring with well-crafted sales pitches that create a sense of magic and the sense you are getting away with something without breaking the law or creating any long-term consequences.
  • It doesn’t seem like the cop-out that some people see bankruptcy as. Settling their debt allows them to pay some of what they owe, as opposed to bankruptcy where your debts are discharged. They just feel morally wrong for not paying anything on a debt that is rightfully their own.

Unfortunately, and regardless of how noble it might be to attempt to resolve debt through a settlement, you are not working with someone who has your best interest in mind. Debt settlement companies are in the business of making money and they make sure they get theirs first. This means that much of what you pay them to supposedly settle on your debt doesn’t even go to your creditors – it stays in the settlement company’s pocket.

You can read more about how the debt settlement process works in this article from The Balance.

Debt Settlement Programs Can Worsen Your Financial Situation

You could pay a debt settlement company for months without ever seeing any benefit. You’ll be in worse financial shape and it could be even more difficult for you to file for bankruptcy. Instead of saving your filing fee, you’ll be paying the debt settlement company to do very little, if anything, for you.

Even if you believe bankruptcy isn’t the right option for you and you’d like to explore debt settlement, it’s important to look at all of your choices. Make sure you understand the truth about your bankruptcy and debt relief options and that you are making the best decision based on your specific circumstances.

To learn more about bankruptcy or debt settlement or to speak to someone about your financial situation, contact the Bankruptcy Law Office of Robert M. Geller at (813) 254-5696.

Archive

Video Testimonials

Tampa Bankruptcy Law Blog

5 Common Budgeting Mistakes Newlyweds Make and How to Avoid Them

Budgeting mistakes are common, especially when you’re young. Not all newlyweds are young adults, but many first-time marriages do involve...
Read More

When Should Married Couples File for Bankruptcy Together?

There's no easy answer to the question of timing when it comes to bankruptcy. In some cases, it may make...
Read More

Can Your Spouses Debt Force You Into Bankruptcy?

If you're married and your spouse has a lot of debt, you may be wondering if that debt can force...
Read More

Do You Need a Bankruptcy Attorney If You’re Divorcing with Financial Problems?

Divorce and bankruptcies are more common than many people realize. Financial problems make a stressful transition even more difficult. If...
Read More

Can You File Bankruptcy without Your Spouse?

Filing for bankruptcy is a decision that should not be taken lightly. It can affect your financial life and the...
Read More

How Seniors Can Avoid Bankruptcy

Seniors are at a high risk of bankruptcy, but there are ways to avoid it. What do you need to...
Read More

What Happens If I Own Too Many Assets to File for Chapter 7?

Does hiding assets in bankruptcy protect them from your creditors? If you own too many assets to qualify for Chapter...
Read More

How to Find the Best Lawyer for Filing for Bankruptcy after Retirement

Many retirees decide to file for bankruptcy as a way to get a fresh start. But finding the right lawyer...
Read More

Does Declaring Bankruptcy Affect My Retirement Savings?

When you're struggling with debt, the thought of bankruptcy might cross your mind. But what would that mean for your...
Read More

Is a Reverse Mortgage Right for Me?

Reverse mortgages in Florida are loans that allow homeowners 62 and older to borrow against the equity in their homes....
Read More

Bankruptcy

For The Next 5 Days GET A FREE BOOK About Bankruptcy

Learn More

Infographics

We are A Debt Relief Agency.
We help people file for bankruptcy under the Bankruptcy Code

Pay Online Bankruptcy Courses Newsletter Subscription

NACBA Logo avvo1 avvo2 avvo3 LEA BBB Logo

Call For A Free Initial Consultation

813.254.5696

Tampa Office

Law Offices of Robert M. Geller, P.A.
807 West Azeele Street
Tampa, FL 33606
T: (813) 254-5696
T: (800) 853-7549
F: (813) 253-3405

Map And Directions

St. Petersburg Office

Law Offices of Robert M. Geller, P.A.
125 5th Street South
(Wells Fargo Financial Center)
2nd Floor, Suite G
St. Petersburg, FL 33701
T: (727) 532-3939

Map And Directions

Pasco Office

23526 State Road 54
Lutz, FL 33559
T: (813) 336-2320

Map And Directions