Are Debt Settlement Programs Risky?


This question can be answered with help of another question - Would the government have allowed debt settlement companies if all such programs were scams? However, there have been some instances where the government has been late to react to such fraudulent schemes. Hence, one cannot really blame those suffering from the problem of excessive debt to worry whether this seemingly excellent remedy is too good to be true or not.

The Association Of Settlement Companies, who gathers data for our association, recently indicated that more than one million dollars worth of debt has been settled by settlement companies in the first half of 2009 alone. We are not talking about those transactions where customers get cheated by fraudulent companies. Rather, we are talking about genuine companies like ours that offer quality service to those individuals or small businesses who prefer not to file for bankruptcy but instead take the time and effort to work with a debt reduction company to negotiate and settle their debt.

Another reason that proves that not all settlement programs available today are scams is the fact that the Federal Trade Commission along with many of the states attorney generals have censored about 25 companies this year alone. So they are fully aware of the companies that may not be on the up and up and they are doing something about it. We are excited about this step, as typically we know who the bad apples are; we just had no way of assisting the government in going after these companies. That has all changed now.

On of the fundamental problem that people face when dealing with debt settlement companies is the fees that they charge. Many companies out there are still charging clients a percentage of their entire debt (usually between 12% and 18% of their total debt). Well, if a client has $35,000 in debt that comes to a whopping $5,250 in up-front fees at 15%. Our company on the other hand would charge you a one-time fee of $499, based up $35,000 in total debt. Needless to say, there is still a big disparity on fee within our industry.

In order to help alleviate any concerns you may have about Nationwide Debt Reduction, give us a call. There is a reason why, with over 15 years of combined experience in the debt reduction industry, we continue to get over 50% of our business thorough referrals.