The Truth About Debt Settlement companies
by Doug Johnson

There are few industries that are as permeated by myths, misinformation and controversy as is the debt settlement industry.  It is my goal to provide truthful, factual, unbiased information in order to dispel the confusion and misinformation.

Unlike debt consolidation companies that forward your monthly payments to your creditors, debt settlement companies place your monthly payments to them into a trust account, then forward the money to your creditors when there is sufficient funds in the account to pay a creditor in full.

Debt settlement companies advertise that they can negotiate with creditors to reduce debts by 40% to 60%.  Is this really possible?  Not if you believe what you read on the internet, which offers many pages of compelling arguments against the efficacy of debt settlement companies.

Do you believe everything you read on the internet?  Let’s think this through.  If you were a creditor, would you be willing to allow your debtors to pay only one-half of what they owe you?  Obviously not. 

But what if your debtors were uncollectable, in other words, they refused to pay you and they were in a position where you could not collect from them by levying their bank accounts, liening their properties, or garnishing their wages.  Now would you be willing to take a reduced amount?  Your choices are - 50% or nothing.  Which are you going to choose?

The truth is - of the thousands of debt settlement companies, there are a few that can negotiate or settle debts by 40% to 60% as advertised.  But they charge fees upwards of 15% of your debt.

Your goal as a debtor should be to become “bullet-proof” and you will be in the drivers seat to negotiate with your creditors without paying a debt settlement company to do it for you.

A few words of advise.  Stay away from back dated documents, hiding assets off-shore or in trusts, transferring properties to other people, or any other strategies that are not lawful. 

NOTE:  This author is not suggesting you protect assets from government authorities or put yourself in a position to restrict the payment of child support.