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Not all debt settlement companies are created equal

Many Ohioans who are considering personal bankruptcy are likely in that position due to excessive amounts of credit card debt. Naturally, debt relief is one of the primary reasons people file for Chapter 7 or Chapter 13 bankruptcy. It is distressingly easy to ring up large credit card bills and then not be able to pay for them. Promotional interest rates expire, and what might have started out as reasonable amounts of debt turn into something overwhelming.

Debt settlement companies are keenly aware of this. As a result, they often concentrate lots of their resources toward marketing, hoping to get people to sign up for their services. However, many for-profit debt settlement companies do not always have consumers' best interests in mind.

In many cases, these debt settlement companies will attempt to negotiate with credit card companies for a reduced amount that you will owe. However, the credit card companies are under no obligation to agree to this; this means that the efforts of the debt settlement companies --despite what you have paid them to help you -- might be for naught.

Many of the arrangements require consumers to deposit money every month into a special savings account for a substantial period of time, often three years. If people aren't able to meet that obligation -- 36 payments over time -- then the arrangement might fall through.

Not all debt settlement companies are untrustworthy, but it can be hard to tell which are and which aren't. It may be in your best interests to consult with an experienced Ohio debt relief attorney for advice.

Source: Federal Trade Commission, "Settling Credit Card Debt," retrieved Oct. 31, 2013

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