Problems and solutions are part and parcel of our life. As there is no dearth of problems, likewise there are plenty of solutions for each problem. Legal, financial, relationship, educational etc- all sorts of troubles in a person’s lives has specialised consulting agencies which work towards a set goal. The goal is reached working in collaboration with the client’s interest in mind and with the knowledge and experience of the skilled experts in the related arena.
With the abundance of companies for debt settlement that are afloat in the market waiting to grab consumer’s attention, the customer may sometimes feel swayed by the lucrative manifestos and brochures. It becomes imperative that a person, whose financial status is already so fragile that he has opted for a solution of Debt settlement, should not get another shock treatment, if he has to find out that the company has ditched him midway.
Perils on the Way to Debt Settlement
The Debt settlement industry is largely unregulated. It is like a last ray of flickering hope for a person who is trying to avoid bankruptcy on one side and in attempting to pay off the outstanding loans on the other hand. Apart from confusing the term of Debt Settlement with debt management and debt consolidation, there are various other perils which the Debt Settlement industry may sometimes present before the client.
- Fraud: The most common danger in the industry of debt settlement is fraud by the so called companies. There are many unregistered and unlisted companies that have their agents on the lookout for clients that are desperately looking for help and guidance. Beware of the companies who ask for hefty sum of money as fee right up front. This is not the time when you can take any more loss in terms of money.
- Credit Score Damage in credit cards: Non payment of bills on time damages the scores in the credit account and when one decides to settle for a lesser amount than the actual debt, it further dents a hole in the credit score.
- Lack of regulation: The unregulated industry of debt settlement is usually not covered by the laws of the government. Therefore, it is very difficult to drag the company into a court of law. Although there are rules and regulations from some concerned authorities, it is not full proof. This is a major gaping hole in the industry.
- Taxes: Taxes form one of the most confusing subjects in the industry of debt settlement. What is expected and what is paid is always debatable and it is better to be on the safer side of the law, since opting for debt settlement already indicated a delicate financial condition of the household.
- Cost: The cost of service provided by the company which is dealing with debt settlement case of a particular individual or organisation is a point to be taken under consideration when opting for the company. This can later lead to trouble as it is an added cost over the outstanding amount of loan to be repaid.