The latest scam that is being perpetrated on unsuspecting consumers is the Debt Negotiation scam. Credit card ridden consumers are lulled into signing up for a deal they know sounds too good to be true.... but it's either offered by lawyers or by organizations that sound as though they are funded or sponsored by the federal government. Consumers often sit through a meeting where they are promised the world... but then they sign a contract that is quite different than that which was promised.
At the end, the consumer has given thousands of dollars away which never went towards paying the settlements --- The debt relief organization has pocketed the cash and often hasn't spent one minute negotiating anything. Because the consumer never read or understood the contract, there really hasn't been any breach of contract because those contracts usually promise nothing.
The contract language often states that settlements will be attempted to be done within three to four years from the time the consumer signs up! No promises about results. (Keep in mind, four years is the statute of limitations to file a lawsuit based on a written contract). By the time four years has come, the credit card companies will have sued you. If you are sued, the defense of the lawsuit is not provided by the Debt Negotiation scammers. So you are often either forced to hire another attorney, or you end up having judgment entered against you.
If you are thinking about entering into an agreement for someone to negotiate your debt settlements, only pay them for time spent on actually negotiating for you. You don't have to pay them a percentage of what debt they eliminate, because often the creditor will reduce the amount owing to 60% of the original amount owing before one negotiation event occurs.
Don't be fooled into paying a percentage of the amount that gets reduced. This amount can be exorbitant for the effort expended. Pay an attorney an hourly rate for the few hours invested into negotiating your debt down. You'll end up saving thousands!
Check out my recent article on Debt Negotiation Scams at the Newsletter link at www.locklearlaw.com
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