A Bankruptcy and Debt Relief Lawyer and Attorney Andy Miofsky

2249 Pontoon Road, Granite City Illinois 62040


An Illinois Bankruptcy Lawyer and Attorney 618-931-1313 Offering Chapter 7 and Chapter 13 Bankruptcy Attorney information in Madison, St Clair & Southern Illinois counties

Debt Settlement

Debt Settlement programs offer to settle your credit card and unsecured debt.  Credit Repair companies promise to improve your credit instantly and eliminate your debt immediately.  Does this sound too good to be true?  Look before you leap into any of these debt settlement or credit repair programs.


Your credit cards earn interest on the unpaid balance, and that interest is added to your account each month.  If you do not pay the minimum monthly payment on time, the account incurs a late payment penalty.  These interest and fees are charged automatically to your account when legally due.


A debt settlement scam operates like this.  You are asked to pay your money to the debt settlement company each month and not to the credit card accounts.  The company will tell you it is collecting your money until you have enough to pay a settlement with an account.  Actually, the company will deduct its fee from the money you pay it each money.  If you owe $10,000 on a credit card account, the debt settlement company might try to settle the account for $4,000 to $5,000.  It will take you over five months to accumulate that much money.  All the while your account balance increases by 20% interest or more, plus non-payment fees.  Plus, the credit card company may turn your case over to an attorney for collection and that attorney may file a credit card debt collection lawsuit against you.  When you tell the debt settlement company you have been sued, you might hear that it could not work a settlement with that credit card company.


You can contact your creditors yourself.  You do not need a debt settlement company to collect your money and pay it to the creditor for you.  A common reason people are not able to solve their debts this way, is because often they have more than one account.  While you might be able to save enough money to settle one small account within a few months, it takes several months to accumulate enough money to settle a large account.  And if you have many debts, you are not able to keep up payments on all of them while you attempt to settle one of the accounts.  And the debt settlement company takes its fee out of your money each month.


Another too good to be true scam involves the credit report dispute letter.  Many companies will sell you a dispute letter to send to the credit bureaus.  You are told to say you do not owe the debt, regardless of whether this is true or not.  When a credit bureau receives a dispute letter, the credit bureau contacts the credit furnisher to validate the debt.  This means the credit report company asks the credit company if you really owe the debt and if the amount of the debt is correct.  To understand how this works, read the credit repair page.
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