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The Debt Settlement process sounds too good to be true. I am being told that I have to wait for my bills to go into collection and be sold by the initial company to a collections firm before they can be settled. The thought of that scares me because I don’t want to get embarrassed with Garnishments ect. Does that make sense to start paying into a trust fund and ignore creditors until the Debt Settlement company can get involved?

Be careful of anything that sounds “too good to be true” especially when it comes to your money! Truthfully, the debt settlement process can be very beneficial to people who are seeking a bankruptcy alternative but it doesn’t come without some risks or drawbacks.

I am not sure who you’ve been speaking with but make sure you understand that your credit score will be damaged, your credit accounts will go into default, there is a tax bill you will pay on the settlement savings, and there are risks of court actions by your creditors.

Now, having said that, the statement too good to be true is relative. If you are in severe trouble and cannot get ahead of your rising credit card bills with all the fees, interest rates, etc. then you may seriously want to consider debt settlement. It is often better than a bankruptcy and can get you out of debt in less than 36 months with fewer long term negative ramifications.

If allowing your accounts to go into default scares you then settlement may not be a good option for you because that is exactly what will happen.

A less drastic solution with less risk for those whose situation doesn’t merit debt settlement, consider debt management also know as credit counseling.

I hope that helps.