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How to Avoid Debt Settlement Stockton CA

Americans now face a daily barrage of ads from debt settlement companies, and more and more people in Stockton are succumbing to the enticing promise of having their debts cut in half. There are of course many legitimate companies, but most are probably not, and they all charge a great deal of money.

209 Injured
(209) 465-8733
2453 Grand Canal Blvd
Stockton, CA
 
Bydesign Financial Solutions
(800) 750-2227
2291 W March Ln
Stockton, CA
 
Bankruptcy Legal Service
(209) 547-8888
343 E Main St
Stockton, CA
 
Attorneys Diversified
(209) 948-6110
306 E Main St
Stockton, CA
 
Allen David & Associates
(209) 473-4800
7400 Shoreline Dr
Stockton, CA
 
Consumer Credit Counseling
(209) 956-1170
1776 W March Ln
Stockton, CA
 
Affordable Aid
(209) 477-7000
1201 N Center St
Stockton, CA
 
Family Matters Legal Services
(209) 941-1066
343 E.Main St. Suite 203
Stockton, CA
 
Help N Hands Credit Assistance
(209) 938-0910
635 N Hunter St
Stockton, CA
 
Antonio R Garcia Law Offices
(209) 888-6350
3439 Brookside Rd
Stockton, CA
 

How to Avoid Debt Settlement

Provided By:

Learn Why Debt Settlement Should Most Likely Be Avoided

Author: Michael Redbourn

Large numbers of Americans are now drowning under credit card debt, and more and more are joining them every day, so it shouldn't come as too much of a shock that many of these people are turning to debt settlement firms that promise to help them lessen their debts.

These companies claim to be staffed by professionals, and they offer to contact creditors and to negotiate reduced terms and balances for their clients, and what's wrong with that?

What's wrong, is that you have to deposit around 15% of what you owe before they'll do anything, and most of them charge a monthly handling fee as well.

Moreover, just to add salt to the wounds, if the company saves you more than $600 then you'll also owe income tax on it.

The number of companies now offering debt settlement services has mushroomed over the last eighteen months, and the sad and worrying thing is that in many cases, they make a struggling person's financial problems even worse.

It's easy to see why these companies are getting so much business though.

Worried people wake up and turn on the radio or television, and they hear and see ads that claim to cut people's debts in half. Half convinced, they open their morning newspapers, or check out the Internet, only to find more fantastic sounding deals.

There are good and even excellent debt settlement companies of course, and there are also alternatives and safeguards available, but the vast majority of Americans are facing growing debt problems for the first time and therefore have no experience, nor information to guide them.

If you're having mounting debt problems, then the first thing you should do is to contact your creditors yourself, and while it's unlikely that they will forgive any of your debt, they will often lower interest rates, and will probably eliminate some fees as well.

Close to a dozen top credit card firms recently agreed to assist customers that are in trouble, and encouraging reports are already coming in which indicate that they're really making efforts to help.

If you're still in trouble after contacting credit card companies that either helped you or didn't help you, then your next step should be to contact a credit counseling agency. Their charges are a fraction of those charged by debt consolidation companies, and in most cases, someone will investigate your situation, and then make you recommendations for between $20 - $100.

A good credit counseling agency will also negotiate you a lower interest rate, get fees removed, and might even set up a debt management plan, which means that you pay a lump sum each month which gets divided up between your various creditors.

By far the best way to find trustworthy companies is to check with your local BBB (Better Business Bureau), and also with the state attorney general's office to find out if there have been any complaints. The best and most reliable companies will also be members of either the National Foundation for Credit Counseling, or the Association of Independent Consumer Credit Counseling Agencies.

Things like year-end bonuses, home equity, and additional credit cards, often gave people a little breathing room, but since those things are now mostly pipedreams, you might feel that going the debt consolidation route is your only option, other than bankruptcy.

If you do decide on debt consolidation, then be sure to check out any company that you're considering with the BBB, and be aware that if you don't have a big enough lump sum to deposit into a third party account, that many debt consolidation companies will require you to make payments into an account until the total agreed upon amount has been deposited.

Without it, they normally won't, and often can't start negotiating settlements with creditors and if this takes several months then you'll be in an ever worsening situation because of added interest and penalties.

Debt settlement is only one step ahead of bankruptcy, and 'paid by settlement' will appear on your credit report, next to your accounts, and your credit rating will suffer accordingly.

About the Author:

The author of this article was a top film sound editor for many years and he produced a film for Columbia at a very young age. He has a passion and a flare for economics, and one of his websites -> Pay Off Debts features the famous Get Free In Three system which has helped a huge number of people get out from under suffocating debts.

Article Source: http://www.articlesbase.com/finance-articles/learn-why-debt-settlement-should-most-likely-be-avoided-943234.html