Debt Settlement: Not a sure thing!
At the end of September, former customers of Express Consolidation Settlement will need to determine if they want to cancel out of their debt management program or have their account transferred to another agency authorized in their state. In December of 2006, the FTC filed a complaint against Express Consolidation Settlement which has now been settled.
In October of 2007, the FTC sued Edge Solutions which ultimately led to its recent closure.
Consumers looking for an alternative to Bankruptcy, often explore debt settlement as an option.
In most cases, if you decide to move forward with debt settlement, you will be asked to stop paying your creditors and to put those funds into a settlement account each month. The settlement account will grow each month until it reaches a point that the debt settlement company feels is sufficient to negotiate the settlement. The amount you owe, the amount you are able to save each month, and what the creditors are willing to accept will dictate how long this process takes.
So, what happens if the debt settlement company you are working with closes during the process?
If a government agency took action against the settlement company, in many cases you will be given the option to cancel out of the program or have your account transferred to another organization. If you discover that the company you are working with is simply going out of business, it is important to do the following:
- Contact your bank to cancel any automatic payments being made to the company.
- Contact the company to determine how to obtain a refund of the money paid into the settlement account. You should also seek a refund of any fees you have paid.
- Contact an Attorney, if appropriate, when having difficulty recovering money already paid.
Once you’ve protected yourself from giving the company any additional money and are looking into ways to obtain a refund of monies paid, you must still determine how to best handle your debt situation. If you are confident debt settlement is the right path for you, you need to choose whether to hire another firm or to attempt to negotiate your debts on your own.
When evaluating any solution to your debt problems, you must understand the consequences of that option not working. Whether the company you choose is ineffective or goes out of business, you must weigh those potential risks when deciding how to best move forward.
Sources:
Express Consolidation
FTC
About the Author:
Chris Rocks is the Founder and Executive Director of the Credit Advisory Alliance (CAA), a membership based organization helping those who have suffered a financial crisis restore their credit and reinsert themselves back into the credit-driven economy. Prior to founding CAA, Chris had successfully helped consumers achieve their financial goals as both a Financial Advisor and the Vice President of a Mortgage Origination Firm.
Post written by Chris Rocks
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Chris Rocks is the Founder and Executive Director of the Credit Advisory Alliance (CAA). CAA is a nationwide membership-based organization that assists consumers recovering from a financial difficulty and those who need a significant increase in their credit score.
Chris began his financial services career as a Financial Advisor helping young families with risk management and asset accumulation strategies. It was during that time that Chris realized that many of these young families also needed someone to guide their choices with regards to debt management.
He made the transition into the mortgage industry where he first worked as a loan originator and later the Vice President of a small mortgage company. As Chris came across clients who had suffered through financial challenges and saw the difficulty they had in re-entering our credit driven economy, he discovered there was a real opportunity to leverage his unique background and help others.
Francine L. Huff is the Publisher and Editorial Director of Super Savvy Publishing, LLC, which provides editorial and publishing services. She is a gifted author, freelance journalist, and motivational speaker who has entertained and motivated a variety of audiences through workshops, panels and keynote addresses. Francine is the author of The 25-Day Money Makeover for Women, which has inspired and motivated many readers to reign in poor financial habits, become good stewards over their money and work toward a debt-free life. She has appeared on a variety of TV and radio shows. Francine previously worked for the Wall Street Journal, where she was the spot news bureau chief, a news editor and a copy editor. She has interviewed a variety of financial professionals about financial issues and strives to present information about managing money in an easy-to-understand format that is accessible to people of all backgrounds and income levels.
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