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Debt settlement is a scam, and any debt relief company that charges you before they actually settle or reduce your debt is in violation of the Federal Trade Commission.When you consolidate your debts or work with a debt settlement company, you’ll only treat the symptoms of your money problems and never get to the core of why you have issues in the first place.Two words for you: , although often the terms are used interchangeably.We’ve already covered consolidation: It’s a type of loan that rolls several unsecured debts into one single bill. Debt settlement means you hire a company to negotiate a lump-sum payment with your creditors for less than what you owe.The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan.In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants.
Even if you qualify for a loan with low interest, there’s no guarantee the rate will stay low.
Dave says, "Personal finance is 80% behavior and only 20% head knowledge." Even though your choices landed you in a pile of debt, you have the power to work your way out! The solution isn’t a quick fix, and it won’t come in the form of a better interest rate, another loan, or debt settlement.
The solution requires you to roll up your sleeves, make a plan for your money, and take action!
Once their fee is accounted for, they promise to negotiate with your creditors and settle your debts. Well, the debt settlement companies usually don’t deliver on helping you with your debt after they take your money.
They’ll leave you on the hook for late fees and additional interest payments on debt they promised to help you pay!