There is no one more vulnerable than someone who is in serious financial trouble.
When money is tight, it’s hard not to panic. Fear takes over. What is going to happen? Can you take my house? My car? What does a trial mean? Can they take my furniture? Most people make poor decisions when they are under terrible pressure and fear dominates their thinking.
More and more commercials are broadcast on television and radio. “Eliminate your Debt”…”Pay off your Mortgage”…”Recover your Credit”…
The ads offer terms of three to six months and promise debt reductions of up to 80 percent.
Client after client has told me, with utter disbelief in their voices, that for a year they sent monthly payments, their hard-earned money, to a debt settlement service in Nashville, Los Angeles, or Baltimore. They kept sending the money until the debt settlement company stopped answering their phones. They later learned that the company never settled anything, that nothing was done to reduce the debt or avoid lawsuits. The company simply disappeared.
“How can they get away with it?”
The sad answer is that they just did.
At a time when they can least afford to waste money and time, when every dollar becomes more important than ever, poor people have just been viciously scammed.
Can the company be sued? Of course, but suing a night flight operation 10 states away, which existed only to run a huge national ad campaign and then disappear, is a highly questionable proposition. It takes time and money, which are scarce.
Interestingly, the theories espoused by many of these companies are good ones. Disciplined saving and professional trading, along with the passage of time, should produce a reduction in overall debt and a better financial picture. It may take 3 years, but if done correctly it is a good solution.
However, the theories remain theoretical, as these companies steal your money in a very tangible way, record the payments as fees, and then collapse behind a corporate shell.
Stay local. Get experienced attorneys who can actually negotiate and litigate. Do business with people you can physically meet, not with a website or “800” number.
There may be good debt settlement companies out there, but I’ve never seen one.
