The false hope of debt settlers

Monday, April 20, 2009

Desperate to not be deadbeats, hundreds of thousands of consumers are turning to debt settlement agencies to escape crushing piles of bills. Everyone has seen the ads: you call, they help, and eventually you are a debt free. But a report in today's New York Times says many consumers have begun to complain that those companies collect large fees and don't do much to help. Unfortunately, it seems the typical experience according to consumers is that a settlement company collects a large fee, often 15 percent of the total debt, and accomplishes little or nothing on the consumer’s behalf. Needless to say, state attorneys general are being flooded with complaints about settlement companies. The Takeaway talks with New York Times business reporter David Streitfeld for more on the story.
"A lot of the people in the debt settlement industry are former workers in the mortgage industry, who probably sold you the mortgage for your house that cost too much money to begin with."
—New York Times business reporter David Streitfeld on debt consultants

For more, read David Streitfeld's article, Debt Settlers Offer Promises but Little Help

Ads like this one from In Charge Debt Solutions offer consumers hope that they can help resolve disputes with debt colletors:

Guests:

David Streitfeld

Comments [2]

stephen

i called the debt management companies and it is true that they do absolutely nothing you can't do yourself. i was able to call the credit cards myself and reduce my payments by almost 50% but you have to push hard to get the credit card companies to accept less than what you owe them.

Apr. 20 2009 09:21 AM
John

Great segment, but why not talk about how the credit card companies are raping the middle class. Chase Bank raised my interest rate from 11.9% to 29% for no reason- I have NEVER had a late payment. When I called to negotiate they would not even discuss it. Shame on Chase!

Apr. 20 2009 09:19 AM

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