Corash & Hollender, P.C.

Get informed before using a debt settlement program

If you have been struggling with debt recently, you may be even more aware of TV and radio commercials offering quick fixes to resolve your problems. Using debt settlement, some companies claim to reduce your debt in record time. Carrying the burden of overwhelming debt can be physically and mentally draining, so the promises these companies make may certainly pique your interest.

While it may sound like a wish come true, debt settlement may cause more harm than good, especially if you deal with a company that does not have your best interests at heart. Understanding the risks of debt settlement can help you decide if it is the best course of action for your situation.

The debt settlement process and risks

Bankruptcy is usually the step many consider when facing a mountain of debt. However, everyone's situation is different, and bankruptcy may not be the best option for you. If you are looking for an alternative to bankruptcy, debt settlement may seem attractive. The general process of debt settlement includes the following steps:

  • You contact a debt settlement company and provide the details about your creditors and debt balances.
  • The company estimates your settlement total and new payment amount.
  • You stop paying your creditors and instead send your monthly payments to the settlement company.
  • The settlement company collects your payments in an account until the balance reaches an amount the company can negotiate with.
  • The company then contacts your creditors to begin negotiating to reduce the amount you owe or lower your payments.
  • The settlement company deducts its fee from your account balance.

The problems arise when the creditors refuse to deal with your settlement company. It is not uncommon, and this may mean you have gone for many months without making a payment, sending your account into default. Your credit score will suffer, and you may have additional fees and interest to pay on the loan. Debt settlement companies do not have regulatory oversight, so you may not have the legal protections you need.

If your goal is to reduce your debt and avoid bankruptcy, debt settlement may have its benefits. However, it is essential that you deal with a program that will not place your future in jeopardy or scam you out of thousands of dollars. Instead, you may wish to seek the advice of a New York attorney who can explain your options and help you determine which is most appropriate for your circumstances.

No Comments

Leave a comment
Comment Information
Arrange a Free Consultation Now ยป

Free Initial Consultation - Credit Cards Accepted

The secret to our success is that we care about our clients. Contact us online or call our law firm at 718-442-4424.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Visit Our Office / Connect With Us / Review Our Firm

1200 South Avenue, Suite 201
The Corporate Park Of Staten Island
Staten Island, NY 10314

Phone: 718-442-4424
Fax: 718-273-4847
Map & Directions

7317 13th Avenue
Brooklyn, New York 11228

Phone: 718-442-4424
Fax: 718-273-4847
Map & Directions

Leave a review

Review Us
Back to Top