A few years back when the economy first began to crumble, my employer was forced to cut everyone’s pay in order to keep the doors open for business. I was already living paycheck to paycheck and after the cuts came, I began subsidizing my earnings with my credit cards. My finances had hit an all time low. I was charging simple things like food and gas to make it through the month. A pack of lunch meat here, a couple of gallons of fuel there, and before I knew it my debt was spiraling out of control. Despair over my financial situation had driven me to thoughts of filing bankruptcy. However, a late-night television commercial caught my attention–an advertisement for a debt settlement company that promised I could become debt free in just a few short months. Without hesitation I gathered up my bills and called the toll-free hotline. A reassuring voice took my information and thirty-minutes later I was on the road to a debt-free life. At least, that is what they promised.
I was instructed to stop all payments on my (then) up-to-date accounts and to start depositing that money into an account in order to save up the funds to pay-off my debt. The first month passed by without much hoopla, just a few “reminder” letters. But come the second month, my phone started blowing-up! When I would get the collection calls, I would direct the caller to the debt settlement company’s toll-free number. That only worked during the second month. When my creditors called the following month, they weren’t accepting the debt settlement’s phone number. I insisted they contact the settlement company and the callers insisted I pay-up! It didn’t take long to realize I had made a huge mistake.
I contacted the debt settlement company and let them know about the phone calls and my creditor’s unwillingness to contact them instead of me. They once again reassured me that this was normal and the credit companies often refuse to deal with the settlement company until it is time to actually settle the debt. I reminded my “counselor” that I was told when I signed up with the program that the settlement company would handle all communication from here on out with my creditors. That was a big fat lie! I started to receive multiple calls every day from my creditors. The calls became relentless. They would start calling at 6AM and call until 10 at night.
Six months into the unremitting calls and I broke. I gave in and surrendered to my creditors. I agreed to resume payments on some. I settled the remaining debt myself without the use of the debt settlement company. In fact, the settlement company ended up settling only one of my accounts. I settled three and rectified two of my accounts and kept them active. I felt ripped off by the debt settlement company. I paid quite a bit for the settlement’s company services when compared to the savings of the one and only account they settled for 60% of my original debt. I settled the other three accounts for 50% to 30% of my debt.
If your considering a debt settlement company’s services to help you get out of a hole, just remember you can do all that they can do. In fact, my debt settlement company could not even address the account until it was sent to a collection agency, while I could still deal with the credit card company. Credit companies are more than willing to work with you if you contact them and discuss your situation. (The two accounts I recovered dropped the late charges to help me get back on track). I wish I had called my creditors when I realized my spending was out of control. They would have worked with me in the beginning and I could have saved hundreds of dollars in the debt settlement fees, not to mention a few hundred points off my beacon. Hindsight is golden.