Debt Settlement


For the most part, debt settlement companies are scams. It doesn’t matter if you hear about them on tv, the radio or read about them on the internet. Almost all of them are designed to do one thing – take your money and do as little as possible to help you.

The typical debt settlement company will tell you the following:

Quit paying your credit card bills, medical bills, etc… Instead, they will ask you to send them money every month for two years or more under the pretense that once enough has been saved, they will settle your debts at 50 cents on the dollar or less.

It really sounds good, doesn’t it?

Here is why it doesn’t work. First, if the creditor does not close your account, when you quit paying on the account your interest rate will be increased to the “universal default rate.” that interest rate is currently as high as 32.9% if you don’t make a payment for two years with late fees, over limit fees and the balance compounded at the universal default rate, the balance will double!

Now let’s say that you owe Citibank $5000 today. Let’s further assume that Citibank doesn’t sue you for two years (which is probably unlikely). The debt settlement company approaches Citibank about settlement two years from now. Well, Citibank may consider a settlement for 50 cents on the dollar but they will settle from the current balance which has ballooned to $10,000! They will settle for $5000 which is what you owed two years ago! You have gained nothing and the worst is yet to come. If you accepted this deal and paid Citibank $5000, you will have to pay income tax on the $5000 that Citibank “forgave!” that is right. If a creditor forgives more than $600, the i.R.S. Requires that the bank send out a tax document called a 1099-c which effectively adds the forgiven debt to your taxable income.

The debt settlement people know that it is very likely that you will be sued before you have saved enough to settle your debts. That is why they are focused on getting their money first. That is why they “front load” their fees. And their fees, well ,their fees are very high. Typically, debt settlement companies charge between 10 and 15% of your total debt. So if you owe $40,000, the fee will be as much as $6,000.

In the above example, the first $6,000 you pay is theirs. It is their non-refundable fee, even if you drop out of their program. (federal regulations enacted in October of 2011 require some debt settlement companies to settle at least one debt before they receive their fee. To comply with this regulation, “honest” settlement companies will settle the smallest debt you have before taking their money. That is all they have to do.)

There are situations where a debt settlement is the best option. In my experience, it is not the best option very often though. If you insist on trying to settle your debts, do not use a debt settlement company!

We can refer you to a legitimate settlement group who will charge you a low flat fee for each debt they settle. They do more than negotiate the amount. They also negotiate how the settlement will be reflected on your credit report. The settlement is documented with a written agreement before you send the creditor a dime. This agreement will protect you from the debt being transferred to other companies, such as debt buyers who may not recognize the settlement and payment all over again.

For those who want to do it themselves, we even offer a free step by step publication for debt settlements with suggested forms included. It’s called “how to settle your debts for 50 percent or less.”

 

What Can My Creditors do?

The short answer is, “A LOT!” It depends on what type of creditors you have. There are three primary types of creditors: secured creditors, unsecured creditors, and priority claims. Secured creditors are usually lenders who have loaned you money to buy a “big ticket” item like a car or a house. They have a lien…

Is Bankruptcy right for you?

The decision to file bankruptcy in Pennsylvania is a tough decision with repercussions that could last years. The attorneys at DeArmond and Associates are committed to helping you get your life back and stopping creditor harassment. Our law firm located in York, PA has a client centered approach and we listen to our clients to find out…

Debt Settlement


For the most part, debt settlement companies are scams. It doesn’t matter if you hear about them on tv, the radio or read about them on the internet. Almost all of them are designed to do one thing – take your money and do as little as possible to help you.

The typical debt settlement company will tell you the following:

Quit paying your credit card bills, medical bills, etc… Instead, they will ask you to send them money every month for two years or more under the pretense that once enough has been saved, they will settle your debts at 50 cents on the dollar or less.

It really sounds good, doesn’t it?

Here is why it doesn’t work. First, if the creditor does not close your account, when you quit paying on the account your interest rate will be increased to the “universal default rate.” that interest rate is currently as high as 32.9% if you don’t make a payment for two years with late fees, over limit fees and the balance compounded at the universal default rate, the balance will double!

Now let’s say that you owe Citibank $5000 today. Let’s further assume that Citibank doesn’t sue you for two years (which is probably unlikely). The debt settlement company approaches Citibank about settlement two years from now. Well, Citibank may consider a settlement for 50 cents on the dollar but they will settle from the current balance which has ballooned to $10,000! They will settle for $5000 which is what you owed two years ago! You have gained nothing and the worst is yet to come. If you accepted this deal and paid Citibank $5000, you will have to pay income tax on the $5000 that Citibank “forgave!” that is right. If a creditor forgives more than $600, the i.R.S. Requires that the bank send out a tax document called a 1099-c which effectively adds the forgiven debt to your taxable income.

The debt settlement people know that it is very likely that you will be sued before you have saved enough to settle your debts. That is why they are focused on getting their money first. That is why they “front load” their fees. And their fees, well ,their fees are very high. Typically, debt settlement companies charge between 10 and 15% of your total debt. So if you owe $40,000, the fee will be as much as $6,000.

In the above example, the first $6,000 you pay is theirs. It is their non-refundable fee, even if you drop out of their program. (federal regulations enacted in October of 2011 require some debt settlement companies to settle at least one debt before they receive their fee. To comply with this regulation, “honest” settlement companies will settle the smallest debt you have before taking their money. That is all they have to do.)

There are situations where a debt settlement is the best option. In my experience, it is not the best option very often though. If you insist on trying to settle your debts, do not use a debt settlement company!

We can refer you to a legitimate settlement group who will charge you a low flat fee for each debt they settle. They do more than negotiate the amount. They also negotiate how the settlement will be reflected on your credit report. The settlement is documented with a written agreement before you send the creditor a dime. This agreement will protect you from the debt being transferred to other companies, such as debt buyers who may not recognize the settlement and payment all over again.

For those who want to do it themselves, we even offer a free step by step publication for debt settlements with suggested forms included. It’s called “how to settle your debts for 50 percent or less.”

 

What Can My Creditors do?

The short answer is, “A LOT!” It depends on what type of creditors you have. There are three primary types of creditors: secured creditors, unsecured creditors, and priority claims. Secured creditors are usually lenders who have loaned you money to buy a “big ticket” item like a car or a house. They have a lien…

Is Bankruptcy right for you?

The decision to file bankruptcy in Pennsylvania is a tough decision with repercussions that could last years. The attorneys at DeArmond and Associates are committed to helping you get your life back and stopping creditor harassment. Our law firm located in York, PA has a client centered approach and we listen to our clients to find out…

Debt Settlement


For the most part, debt settlement companies are scams. It doesn’t matter if you hear about them on tv, the radio or read about them on the internet. Almost all of them are designed to do one thing – take your money and do as little as possible to help you.

The typical debt settlement company will tell you the following:

Quit paying your credit card bills, medical bills, etc… Instead, they will ask you to send them money every month for two years or more under the pretense that once enough has been saved, they will settle your debts at 50 cents on the dollar or less.

It really sounds good, doesn’t it?

Here is why it doesn’t work. First, if the creditor does not close your account, when you quit paying on the account your interest rate will be increased to the “universal default rate.” that interest rate is currently as high as 32.9% if you don’t make a payment for two years with late fees, over limit fees and the balance compounded at the universal default rate, the balance will double!

Now let’s say that you owe Citibank $5000 today. Let’s further assume that Citibank doesn’t sue you for two years (which is probably unlikely). The debt settlement company approaches Citibank about settlement two years from now. Well, Citibank may consider a settlement for 50 cents on the dollar but they will settle from the current balance which has ballooned to $10,000! They will settle for $5000 which is what you owed two years ago! You have gained nothing and the worst is yet to come. If you accepted this deal and paid Citibank $5000, you will have to pay income tax on the $5000 that Citibank “forgave!” that is right. If a creditor forgives more than $600, the i.R.S. Requires that the bank send out a tax document called a 1099-c which effectively adds the forgiven debt to your taxable income.

The debt settlement people know that it is very likely that you will be sued before you have saved enough to settle your debts. That is why they are focused on getting their money first. That is why they “front load” their fees. And their fees, well ,their fees are very high. Typically, debt settlement companies charge between 10 and 15% of your total debt. So if you owe $40,000, the fee will be as much as $6,000.

In the above example, the first $6,000 you pay is theirs. It is their non-refundable fee, even if you drop out of their program. (federal regulations enacted in October of 2011 require some debt settlement companies to settle at least one debt before they receive their fee. To comply with this regulation, “honest” settlement companies will settle the smallest debt you have before taking their money. That is all they have to do.)

There are situations where a debt settlement is the best option. In my experience, it is not the best option very often though. If you insist on trying to settle your debts, do not use a debt settlement company!

We can refer you to a legitimate settlement group who will charge you a low flat fee for each debt they settle. They do more than negotiate the amount. They also negotiate how the settlement will be reflected on your credit report. The settlement is documented with a written agreement before you send the creditor a dime. This agreement will protect you from the debt being transferred to other companies, such as debt buyers who may not recognize the settlement and payment all over again.

For those who want to do it themselves, we even offer a free step by step publication for debt settlements with suggested forms included. It’s called “how to settle your debts for 50 percent or less.”

 

What Can My Creditors do?

The short answer is, “A LOT!” It depends on what type of creditors you have. There are three primary types of creditors: secured creditors, unsecured creditors, and priority claims. Secured creditors are usually lenders who have loaned you money to buy a “big ticket” item like a car or a house. They have a lien…

Is Bankruptcy right for you?

The decision to file bankruptcy in Pennsylvania is a tough decision with repercussions that could last years. The attorneys at DeArmond and Associates are committed to helping you get your life back and stopping creditor harassment. Our law firm located in York, PA has a client centered approach and we listen to our clients to find out…

Debt Settlement


For the most part, debt settlement companies are scams. It doesn’t matter if you hear about them on tv, the radio or read about them on the internet. Almost all of them are designed to do one thing – take your money and do as little as possible to help you.

The typical debt settlement company will tell you the following:

Quit paying your credit card bills, medical bills, etc… Instead, they will ask you to send them money every month for two years or more under the pretense that once enough has been saved, they will settle your debts at 50 cents on the dollar or less.

It really sounds good, doesn’t it?

Here is why it doesn’t work. First, if the creditor does not close your account, when you quit paying on the account your interest rate will be increased to the “universal default rate.” that interest rate is currently as high as 32.9% if you don’t make a payment for two years with late fees, over limit fees and the balance compounded at the universal default rate, the balance will double!

Now let’s say that you owe Citibank $5000 today. Let’s further assume that Citibank doesn’t sue you for two years (which is probably unlikely). The debt settlement company approaches Citibank about settlement two years from now. Well, Citibank may consider a settlement for 50 cents on the dollar but they will settle from the current balance which has ballooned to $10,000! They will settle for $5000 which is what you owed two years ago! You have gained nothing and the worst is yet to come. If you accepted this deal and paid Citibank $5000, you will have to pay income tax on the $5000 that Citibank “forgave!” that is right. If a creditor forgives more than $600, the i.R.S. Requires that the bank send out a tax document called a 1099-c which effectively adds the forgiven debt to your taxable income.

The debt settlement people know that it is very likely that you will be sued before you have saved enough to settle your debts. That is why they are focused on getting their money first. That is why they “front load” their fees. And their fees, well ,their fees are very high. Typically, debt settlement companies charge between 10 and 15% of your total debt. So if you owe $40,000, the fee will be as much as $6,000.

In the above example, the first $6,000 you pay is theirs. It is their non-refundable fee, even if you drop out of their program. (federal regulations enacted in October of 2011 require some debt settlement companies to settle at least one debt before they receive their fee. To comply with this regulation, “honest” settlement companies will settle the smallest debt you have before taking their money. That is all they have to do.)

There are situations where a debt settlement is the best option. In my experience, it is not the best option very often though. If you insist on trying to settle your debts, do not use a debt settlement company!

We can refer you to a legitimate settlement group who will charge you a low flat fee for each debt they settle. They do more than negotiate the amount. They also negotiate how the settlement will be reflected on your credit report. The settlement is documented with a written agreement before you send the creditor a dime. This agreement will protect you from the debt being transferred to other companies, such as debt buyers who may not recognize the settlement and payment all over again.

For those who want to do it themselves, we even offer a free step by step publication for debt settlements with suggested forms included. It’s called “how to settle your debts for 50 percent or less.”

 

What Can My Creditors do?

The short answer is, “A LOT!” It depends on what type of creditors you have. There are three primary types of creditors: secured creditors, unsecured creditors, and priority claims. Secured creditors are usually lenders who have loaned you money to buy a “big ticket” item like a car or a house. They have a lien…

Is Bankruptcy right for you?

The decision to file bankruptcy in Pennsylvania is a tough decision with repercussions that could last years. The attorneys at DeArmond and Associates are committed to helping you get your life back and stopping creditor harassment. Our law firm located in York, PA has a client centered approach and we listen to our clients to find out…

Debt Settlement


For the most part, debt settlement companies are scams. It doesn’t matter if you hear about them on tv, the radio or read about them on the internet. Almost all of them are designed to do one thing – take your money and do as little as possible to help you.

The typical debt settlement company will tell you the following:

Quit paying your credit card bills, medical bills, etc… Instead, they will ask you to send them money every month for two years or more under the pretense that once enough has been saved, they will settle your debts at 50 cents on the dollar or less.

It really sounds good, doesn’t it?

Here is why it doesn’t work. First, if the creditor does not close your account, when you quit paying on the account your interest rate will be increased to the “universal default rate.” that interest rate is currently as high as 32.9% if you don’t make a payment for two years with late fees, over limit fees and the balance compounded at the universal default rate, the balance will double!

Now let’s say that you owe Citibank $5000 today. Let’s further assume that Citibank doesn’t sue you for two years (which is probably unlikely). The debt settlement company approaches Citibank about settlement two years from now. Well, Citibank may consider a settlement for 50 cents on the dollar but they will settle from the current balance which has ballooned to $10,000! They will settle for $5000 which is what you owed two years ago! You have gained nothing and the worst is yet to come. If you accepted this deal and paid Citibank $5000, you will have to pay income tax on the $5000 that Citibank “forgave!” that is right. If a creditor forgives more than $600, the i.R.S. Requires that the bank send out a tax document called a 1099-c which effectively adds the forgiven debt to your taxable income.

The debt settlement people know that it is very likely that you will be sued before you have saved enough to settle your debts. That is why they are focused on getting their money first. That is why they “front load” their fees. And their fees, well ,their fees are very high. Typically, debt settlement companies charge between 10 and 15% of your total debt. So if you owe $40,000, the fee will be as much as $6,000.

In the above example, the first $6,000 you pay is theirs. It is their non-refundable fee, even if you drop out of their program. (federal regulations enacted in October of 2011 require some debt settlement companies to settle at least one debt before they receive their fee. To comply with this regulation, “honest” settlement companies will settle the smallest debt you have before taking their money. That is all they have to do.)

There are situations where a debt settlement is the best option. In my experience, it is not the best option very often though. If you insist on trying to settle your debts, do not use a debt settlement company!

We can refer you to a legitimate settlement group who will charge you a low flat fee for each debt they settle. They do more than negotiate the amount. They also negotiate how the settlement will be reflected on your credit report. The settlement is documented with a written agreement before you send the creditor a dime. This agreement will protect you from the debt being transferred to other companies, such as debt buyers who may not recognize the settlement and payment all over again.

For those who want to do it themselves, we even offer a free step by step publication for debt settlements with suggested forms included. It’s called “how to settle your debts for 50 percent or less.”

 

What Can My Creditors do?

The short answer is, “A LOT!” It depends on what type of creditors you have. There are three primary types of creditors: secured creditors, unsecured creditors, and priority claims. Secured creditors are usually lenders who have loaned you money to buy a “big ticket” item like a car or a house. They have a lien…

Is Bankruptcy right for you?

The decision to file bankruptcy in Pennsylvania is a tough decision with repercussions that could last years. The attorneys at DeArmond and Associates are committed to helping you get your life back and stopping creditor harassment. Our law firm located in York, PA has a client centered approach and we listen to our clients to find out…

Debt Settlement


For the most part, debt settlement companies are scams. It doesn’t matter if you hear about them on tv, the radio or read about them on the internet. Almost all of them are designed to do one thing – take your money and do as little as possible to help you.

The typical debt settlement company will tell you the following:

Quit paying your credit card bills, medical bills, etc… Instead, they will ask you to send them money every month for two years or more under the pretense that once enough has been saved, they will settle your debts at 50 cents on the dollar or less.

It really sounds good, doesn’t it?

Here is why it doesn’t work. First, if the creditor does not close your account, when you quit paying on the account your interest rate will be increased to the “universal default rate.” that interest rate is currently as high as 32.9% if you don’t make a payment for two years with late fees, over limit fees and the balance compounded at the universal default rate, the balance will double!

Now let’s say that you owe Citibank $5000 today. Let’s further assume that Citibank doesn’t sue you for two years (which is probably unlikely). The debt settlement company approaches Citibank about settlement two years from now. Well, Citibank may consider a settlement for 50 cents on the dollar but they will settle from the current balance which has ballooned to $10,000! They will settle for $5000 which is what you owed two years ago! You have gained nothing and the worst is yet to come. If you accepted this deal and paid Citibank $5000, you will have to pay income tax on the $5000 that Citibank “forgave!” that is right. If a creditor forgives more than $600, the i.R.S. Requires that the bank send out a tax document called a 1099-c which effectively adds the forgiven debt to your taxable income.

The debt settlement people know that it is very likely that you will be sued before you have saved enough to settle your debts. That is why they are focused on getting their money first. That is why they “front load” their fees. And their fees, well ,their fees are very high. Typically, debt settlement companies charge between 10 and 15% of your total debt. So if you owe $40,000, the fee will be as much as $6,000.

In the above example, the first $6,000 you pay is theirs. It is their non-refundable fee, even if you drop out of their program. (federal regulations enacted in October of 2011 require some debt settlement companies to settle at least one debt before they receive their fee. To comply with this regulation, “honest” settlement companies will settle the smallest debt you have before taking their money. That is all they have to do.)

There are situations where a debt settlement is the best option. In my experience, it is not the best option very often though. If you insist on trying to settle your debts, do not use a debt settlement company!

We can refer you to a legitimate settlement group who will charge you a low flat fee for each debt they settle. They do more than negotiate the amount. They also negotiate how the settlement will be reflected on your credit report. The settlement is documented with a written agreement before you send the creditor a dime. This agreement will protect you from the debt being transferred to other companies, such as debt buyers who may not recognize the settlement and payment all over again.

For those who want to do it themselves, we even offer a free step by step publication for debt settlements with suggested forms included. It’s called “how to settle your debts for 50 percent or less.”

 

What Can My Creditors do?

The short answer is, “A LOT!” It depends on what type of creditors you have. There are three primary types of creditors: secured creditors, unsecured creditors, and priority claims. Secured creditors are usually lenders who have loaned you money to buy a “big ticket” item like a car or a house. They have a lien…

Is Bankruptcy right for you?

The decision to file bankruptcy in Pennsylvania is a tough decision with repercussions that could last years. The attorneys at DeArmond and Associates are committed to helping you get your life back and stopping creditor harassment. Our law firm located in York, PA has a client centered approach and we listen to our clients to find out…

Debt Settlement


For the most part, debt settlement companies are scams. It doesn’t matter if you hear about them on tv, the radio or read about them on the internet. Almost all of them are designed to do one thing – take your money and do as little as possible to help you.

The typical debt settlement company will tell you the following:

Quit paying your credit card bills, medical bills, etc… Instead, they will ask you to send them money every month for two years or more under the pretense that once enough has been saved, they will settle your debts at 50 cents on the dollar or less.

It really sounds good, doesn’t it?

Here is why it doesn’t work. First, if the creditor does not close your account, when you quit paying on the account your interest rate will be increased to the “universal default rate.” that interest rate is currently as high as 32.9% if you don’t make a payment for two years with late fees, over limit fees and the balance compounded at the universal default rate, the balance will double!

Now let’s say that you owe Citibank $5000 today. Let’s further assume that Citibank doesn’t sue you for two years (which is probably unlikely). The debt settlement company approaches Citibank about settlement two years from now. Well, Citibank may consider a settlement for 50 cents on the dollar but they will settle from the current balance which has ballooned to $10,000! They will settle for $5000 which is what you owed two years ago! You have gained nothing and the worst is yet to come. If you accepted this deal and paid Citibank $5000, you will have to pay income tax on the $5000 that Citibank “forgave!” that is right. If a creditor forgives more than $600, the i.R.S. Requires that the bank send out a tax document called a 1099-c which effectively adds the forgiven debt to your taxable income.

The debt settlement people know that it is very likely that you will be sued before you have saved enough to settle your debts. That is why they are focused on getting their money first. That is why they “front load” their fees. And their fees, well ,their fees are very high. Typically, debt settlement companies charge between 10 and 15% of your total debt. So if you owe $40,000, the fee will be as much as $6,000.

In the above example, the first $6,000 you pay is theirs. It is their non-refundable fee, even if you drop out of their program. (federal regulations enacted in October of 2011 require some debt settlement companies to settle at least one debt before they receive their fee. To comply with this regulation, “honest” settlement companies will settle the smallest debt you have before taking their money. That is all they have to do.)

There are situations where a debt settlement is the best option. In my experience, it is not the best option very often though. If you insist on trying to settle your debts, do not use a debt settlement company!

We can refer you to a legitimate settlement group who will charge you a low flat fee for each debt they settle. They do more than negotiate the amount. They also negotiate how the settlement will be reflected on your credit report. The settlement is documented with a written agreement before you send the creditor a dime. This agreement will protect you from the debt being transferred to other companies, such as debt buyers who may not recognize the settlement and payment all over again.

For those who want to do it themselves, we even offer a free step by step publication for debt settlements with suggested forms included. It’s called “how to settle your debts for 50 percent or less.”

 

What Can My Creditors do?

The short answer is, “A LOT!” It depends on what type of creditors you have. There are three primary types of creditors: secured creditors, unsecured creditors, and priority claims. Secured creditors are usually lenders who have loaned you money to buy a “big ticket” item like a car or a house. They have a lien…

Is Bankruptcy right for you?

The decision to file bankruptcy in Pennsylvania is a tough decision with repercussions that could last years. The attorneys at DeArmond and Associates are committed to helping you get your life back and stopping creditor harassment. Our law firm located in York, PA has a client centered approach and we listen to our clients to find out…

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