Debt settlement programs

Hi, I’m new here but I really need some advice. My husband and I are in a financial mess. We were both out of jobs for about 2 years during which time he was hospitalized (no insurance). We have accumulated a lot of debt that we cannot pay. We had filed chapter 13 bankruptcy before we got laid off, then it was dismissed because we couldn’t make the weekly payments.

We are working now and could pull out of this if it wasn’t for the old debts coming back to us. I want to know if anyone has an opinion on debt settlement programs. I’ve found several online, but I’m a little leery. We don’t want to try to refile bankruptcy, but I’m not sure about this other option either. Any advice would be greatly appreciated.

Don’t go to a company for debt settlement until you have done your research. Start with your local public library and see what books they have available. Most people can handle this themselves. Both Nolo Press and WrightsLaw publishers have books that include phone scripts and preformed letter so all you have to do it fill in the blanks. If you search the messages on this board there is also good information about getting creditors to settle. You don’t need to pay someone to do this for you. You can do it yourself.

Also, check out FTC web site. [Federal Trade Commission, federal regulator of credit industry] I would be wary of debt settlement companies because according to my research many or most of them are scams.

In my case, which I don’t necessarily recommend, but I was in desperate situation – after not making any payments for 6-9 months, (and after 6-9 months of harassing phone calls) the credit card companies offered to settle for 50% of my (very high) debt, and at a very low interest.

So I believe they are very willing to work with you. Like was said, do the research and then try to negotiate. 99% of debt settlement companies on the Internet are fly-by-night at best. The least risky and most effective way to do this is by using an attorney. Depending on the lawyer and specfic cases, I have seen a $25,000 debt settled for 35 cents on the dollar payable over 3 years in monthly installments.

If I had a debt issue, I would find a lawyer that a) represents you – not the debt settlement company’s in-house counsel and b) a firm that will provide counsel in your state in the event it goes into limitation. Also beware, that there are ‘debt settlement firms’ posing as ‘law firms’. I have seen many firms refuse to negotiate with so called ‘debt settlement’ firms, but very willing to negotiate with an attorney.

Reputable law firms typically work on a flat retainer plus some type of contingency for saving the client money. If you have tax issues, an attorney may be able to help you there as well.

The programs DO work. Depending on your financial circumstances. It IS possible to get out of debt at 50-60 cents on the dollar with all professional fees included.