Industry Aspects
As we noted earlier, there are a number of companies and businesses available who will offer to help manage your debt for a fee. This can be done with a new loan or without one. However, in almost all cases you will be charged a service fee up front for the help. This is an additional cost to consider. Overall, the fee may be worth the trouble if you can secure the help of reputable company that produces results. However, there have been frequent cases of companies taking fees and aggregate payment amounts and never sending the money on to the debt owed as was originally agreed. That’s where the problems begin.
The settlement and liaison companies offer primarily to manage your payment for you. That means paying the service fee and giving them the money that you intend to go to the credit card or lender owed. The liaison then manages the payment instead of you. A non-legitimate service provider can walk away with your fee payment and your debt payment without ever doing what they agreed to. This can result in hundreds of dollars stolen in very little time. Additionally, you will end up suffering additional late penalties and fees from your original lender, adding to your costs. It can even go into collection, making your existing situation worse.
The liaison and settlement industry is not heavily regulated, so there is a lot of wiggle room for what companies can offer in services. They are not lawyers or bankers, but they take on the representation appearance of such and state they have inside knowledge to how lenders operate. The big protection for consumers is to do your own research and check these companies out first thoroughly before signing up for their services and paying the service fee. |
