One of the issues that often cause debtors' financial problems to worsen is that they many are looking for quick and easy solutions to very complicated debt problems. This is a weakness that many debt settlement companies and foreclosure "specialists" prey on to bilk debtors out of their money. Both debt settlement companies and foreclosure "specialists" insist that their "solutions" are not only quick and easy but offer better results than bankruptcy. Below are few facts that both debt settlement companies and foreclosure specialists don't want you know:
- Creditors have no obligation to negotiate your debts or to forgive any portion of the debt unless you have filed bankruptcy. And while debt settlement companies and foreclosure "specialists" claim to have the power to force the hand of creditors, it simply is not true.
- Many debt settlement companies and foreclosure "specialists" encourage their clients to stop paying their mortgage and credit card debts in an effort to force the creditors to the negotiating table. But the fact is that in this case the law is on the side of the creditor. If you stop paying your bills your creditor has the right to sue you. Even if you show up to court, most likely you won't win and your wages may be garnished and bank accounts seized. Only in bankruptcy, can a debtor stop paying their bills and not face a lawsuit and the subsequent wage garnishments and asset seizures afterward.
- Many of the these so-called debt settlement companies and foreclosure "specialists" have schemes that are bordering on bizarre and even illegal and only a very small percentage of their clients successfully complete any program they have to offer. And even then, the programs completed don't often cover all of the debtor's debt issues. Only bankruptcy has the power to pull all debts under its jurisdiction and forgive the vast majority of unsecured debt.