Debt Settlement

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Debt Settlement

A debt settlement is a debt relief alternative, that sounds great on paper but in reality is full of half-truths and misleading information.  A debt settlement company will claim to settle your debt for pennies on the dollar, supposedly settling your debt for half of what you own. If it sounds too good to be true, then unfortunately it is.  It is important to know how a debt settlement functions and how it will affect a consumer’s financial future for years.

debt settlement companies san diego

The Down Falls

OF DEBT SETTLEMENT

  • Negatively impact your credit score for years
  • Late fees are accumulated increasing your overall debt, sometimes by $1000s
  • Additional tax implications.
  • High service fees
  • No financial education or support
  • Continued harassing calls from creditors demanding payment
  • Some credits can refuse a settlement and is within their rights to sue for full payment
  • High cancelation fees
Is debt settlement legitimate

DEBT SETTLEMENT

In the News

The Consumer Financial Protection Bureau files lawsuit against the nation’s largest debt settlement service provider, Freedom Debt Relief.

Read about Debt Settlement’s deceptive practices here with the official report

Debt Settlement vs Debt Management

To compare two very popular debt relief program, click on the tabs to find out debt managemenet and debt settlment are similar and how they are different. 

Education

Provides on-going financial education and support

Payments

One low monthly payment, based on a personalized financial budget. Payment is distributed among your creditors.

Interest Rates & Fees

Negotiate with creditors to lock in lower interest rates & fees.

Cancellation

No penalty to cancel, but you will still owe your creditors the remaining balance at your original interest rate

Credit Score

Assistance through debt management programs should not hurt your credit score.

Management Fees

Small regulated state fee.

Collection Calls

Stop collection calls.

Monthly Payments

Each payment is distributed to your creditors every month.

Education

No education.

Payments

Stop all credit payments.  Make deposits into a savings account through the debt settlement company for up to 3 years until debts are settled.

Interest Rates & Fees

No change in your interest rate.  Late fees will accumulate and be added to your debt.

Cancellation

Usually, a large penalty to cancel the program. Will be responsible to pay remaining balance plus all additional late fees.

Credit Score

Accounts that are past due and settled for the less amount will have a large negative impact on your credit score.

Management Fees

Fees could be as high as 20% of the debt that is settled. Ex: $10,000 debt = $2000 fee

Collection Calls

Collection calls will continue to harass you.

Monthly Payments

Creditors could file a lawsuit against you if they are not receiving payment.

A Debt Settlement Alternative

Credit counseling is a free service that can help anyone looking for debt relief or bankruptcy alternatives. If you are struggling with debt, and are looking for a way out, without sacrificing your credit.

Give one of our credit counselors a call at 888-960-5774
or start your credit counseling online.

Consumers Alliance Processing credit counseling services will help you find a debt relief solution that works for you. We offer free credit counseling sessions to anyone who is actively seeking debt relief. Our credit counselors will evaluate your finances, help create a realistic budget and recommend a no obligation debt relief program. Our credit counselors may recommend a debt management plan, which will consolidate your bills into a single monthly payment, reduce overall interest rates, likely improve your credit score, and get you debt free in 3-5 years.

Struggling with your debt? We can help!

Talk to a debt counselor today and take control of your debt.  Call for a free financial assessment with a certified credit counselor and receive a customized budget and a no-obligation debt relief quote.

For more information visit our FAQs

or call today for a free debt consultation