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When entering a debt settlement program, and start paying the debt settlement company and stop paying creditors, will they start harrasing you, or do you consult first with the creditors so they know what is going on?

As you mention, the process of debt settlement entails a suspension of payments to your creditors while you accumulate money in a special purpose account. This account will stockpile the funds until you have enough money for your settlement company to start the negotiation process with your creditors. During this time when you stop paying the creditors they have a right to continue to contact you for repayment within the established collection laws, however, a good debt settlement company will often be able to reduce the volume of calls…but there are no guarantees.


Once your creditors become aware you’ve entered a settlement program (as notified by your settlement company), they often will deal directly with them. This is often due to the relationships that a large setlement company already has with the large creditors. However, there are no guarantees that calls will go away and if a settlement company that tells you as such, that is a big red flag.

Each creditor is different as to how they proceed with consumers who owe them outstanding balances. Furthermore, the call volume you recieve depends on what company is doing the collections. Is it the creditor themselves or have they hired an outside collection agency to work on your account? There are many variables so there is no clear cut answer.