“You heard it through the grapevine”
There are so many tales that keep going around about Debt Settlement and it seems people don’t know exactly what they are talking about. Some have never even been in any sort of situation that would warrant an explanation, but they will be the first ones to tell you a thing or two about it. It is always a good idea to first educate your self before settling for someone else’s notion about Debt Settlement. They are everywhere though, so it is kind of hard to ignore them, but equip your mind with sufficient knowledge so that you don’t fall for Debt settlement Myths.
Below are some Debt settlement myths that could be further from the truth.
1) Any Debt is eligible for settlement
Unsecured debts, for example; Credit cards, student loans and medical bills are the only kind of debts that Debt settlement companies will touch. As far as secured loans such as a house mortgage or car loan; you are out of luck. The bank just comes and seizes the property. The debt settlement myth that you can successfully negotiate and have some sort of resolution in paying the debt is not true.
2) Anybody can be qualify in getting Debt Settlement
Debt collectors will not come after individuals who are experiencing financial difficulty in their lives such as medical expenses, lost employment or having a bad divorce. If you are not in any of those slots, then they are not very forgiving in that sense. If you appear to be someone who is not so badly off financially, you better believe that they will come after you.
3) You can use any Debt settlement Company
That is simply not true. You can not “picky picky ponky” yourself out of this one. You have to do your research and find out which debt settlement companies out there claiming to be legit are ACTUALLY legit. This is one Debt settlement Myth you do not want to take lightly because you might end up losing a lot more than you have ever owed in your life. Look them up at the Better Business Bureau to find out if they have registered with them or if there have been any complaints about them.
4) You can’t settle your debt-only a debt settlement company can
For goodness sake, it is your debt! No one knows it better than you because you got yourself there in the first place. There is absolutely no reason why you shouldn’t be able to do it yourself. You are fully capable of getting yourself out of it. There is nothing they can do that you can’t do. This debt settlement myth can have you thinking that there is nothing you can do for yourself, unless someone comes and shows you how!
5) Creditors and Debt Settlement Companies are “buddies”
There is no such thing. They do not call each other up and have a lengthy chat about how to settle your debt. They have no ties whatsoever. The only common thing is you. They both don’t even care to deal with each other that much. In fact, a creditor is more willing to deal with you than having to talk to a debt settlement company that is representing you.
6) Your money is in good hands (Debt Settlement Company)
They tell you to stop making payments to your creditor and instead, send the money to them. The minute your creditors realize that you are not sending in payments and soon after get an offer from the debt settlement company, they will be more than willing to make a settlement.
However, it is a risk you are taking by depositing your money with them because they are not FDIC insured. Most of them end up going out of business and just fall out of the face of the earth. Your money is gone and you still owe the creditors. This debt settlement myth is misleading. Every time you give someone money in any case, it is always risky.
7) A debt settlement deal will make your credit score better
The only time you are guaranteed a good credit score is if you have good credit. Any other time is vague territory. If you have been paying your money to the debt settlement company, then keep in mind that these payments are not to the actual creditors. Therefore, your debt is still outstanding. When and if they do make a settlement for you; that might be the only time your credit score starts to get better and that is by your persistence, not by their efforts. All they are after is their money, not fixing your credit. It is one debt settlement myth that can lead you astray in the pursuit of regaining good credit.