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Debt Settlement Might Not Be As Helpful As You Think

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Debt settlement advertisements are very familiar to us; they promise us to be debt-free with in some odd months and lowering debt by 50% if we use their services. However, the debt settlement industry is not as reliable as their ads make them seem. Borrowers are better off avoiding these companies all together; they tend to turn into an unwanted risk.

Debt settlement involves a client defaulting on most if not all of their debts. Then with the money that they would put toward paying credit card monthly payments gets taken and put into an account to fund their settlement. By doing this, debtors' risk their money on a settlement that might not work; while they wait for that to happen or not happen, their credit card debts grow, leaving them in the end owing more money than when they began.

In recent analysis of data from the American Fair Credit Council, borrowers who sign up with debt settlement companies most of the time won't see the financial benefit unless the two-thirds of a debtor's debt is settled. On top of the slim chance that much debt can be settled, borrowers need to remember that there is still tax liability on potential settled debts and fees to maintain account for settlement, which can significantly outweigh the financial benefits of working with a debt settlement company.

Debt settlement companies are risky and could leave debtors and/or their families worse off in the long run. To avoid these companies and seek debt relief, one should look toward receiving help from an attorney who is knowledgeable about debt from credit cards, parking tickets, medical bills, etc. Sometimes bankruptcy might be the best option for you, and that is where a credible attorney will come into play. Seeking the help when needed is the first step in becoming debt free and creating a financially stable life for you and for your family.


We at Timothy J. Sierra Attorney at Law would like to state that our blog posts and links, on our web page or any other social media outlet, to any other web pages are not intended for legal advice. We are not responsible for third party website information. If one is in need of legal advice please contact an attorney directly.

Source: American Banker | Debt Relief

  • "When I first came to the decision to file for bankruptcy, I had no idea where to start. I began researching attorneys on the internet and came across the information for Tim Sierra. Since he specialized in bankruptcy and had a lot of experience......"
  • The process of going through bankruptcy could be very overwhelming but Tim made me feel at ease and I felt that my needs were being taken care of. I truly feel that he had my best interests in mind and the lines of communication were always open....
  • "I had to file a Chapter 7 bankruptcy. I didn't know anyone who could refer someone so I took a chance and just looked on the Internet. I don't remember exactly why I chose Mr. Sierra, but I am glad I did..."
  • He was honest, straightforward, and hard-working. In my case I ended up with some extenuating circumstances and he handled the matter professionally even though I'm sure the work probably exceeded what he originally felt it would be....
  • I don't ever write reviews, and I had no prior relationship with Mr. Sierra. This review is simply being written as a service to others that Mr. Sierra is an excellent attorney and should be considered for your needs if you need one....
  • "I'm very happy to have been referred to Tim for my Chapter 7 filing. He was knowledgeable in his field and very responsive in replying to any questions or concerns I had. Tim was also very accommodating with meeting times..."
  • " I recently was in need of Mr. Sierra's services and I found him to be very understanding and helpful in my particular circumstance. He met with me and explained everything in full detail and also answered every question that I had....."
  • " I recommend Timothy Sierra a loyal and dependable lawyer. When you talk to him you feel that you are with a friend or a member of your family. Timothy is able to lead you in every step of the process. Good job Timothy."
  • " Bankruptcy is a private and personally devastating life event. Timothy Sierra and his assistant, Nancy, made the process as painless as possible. They kept in close contact via phone and email so I always knew what was happening in my case...."
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