You hear radio ads telling you about a company that can help you settle your credit card debt for pennies on the dollar. Is this the answer to your debt problems? Probably not. Debt settlements fail for most people. One study found that less than 10% of people enrolled in a debt settlement program complete it.
Here's why these programs fail for most people:
-they make you go into default on your debts, which hurts your credit rating and jacks up your interest rates on credit card debts
-not all debts are included--some creditors won't work with debt settlement companies
-creditors can still sue you, even if you are enrolled in a program, and garnish your wages or levy a bank account if they win
-fees charged by debt settlement companies can be very high
In short, be very skeptical about whether debt settlement is right for you. If in doubt, speak with an experienced lawyer.