Castle Law Office Blog | Missouri & Illinois Bankruptcy Legal Blog

What Is Being Done About Debt Settlement?

Every morning on my way to the office, I hear the same commercial. It promises anyone who suffers from credit card or medical debt the chance to march into their banks and proclaim that they don’t intend to pay their debt. I know, I know, you are saying, “But James! That sounds great!” And in a perfect world, you would be right. Unfortunately, 15 years of experience in the debt relief business has told me that it just isn’t true.

In July, 13,000 credit card holders were the victims of fraud by a Florida based group of debt settlement firms. Stories like these are hardly newsworthy anymore. You could probably write an entire newspaper about scams carried about by debt settlement agencies. The internet and yellow pages are filled with advertisements for debt settlement firms—and how will you ever know if it is a scam? The principle idea of debt settlement is flawed anyway. It settles your debt for a hefty fee and still can’t protect you from the legal ramifications of debt.

The FTC took a strike against the credit repair industry with Operation Clean Sweep. So, how are we fighting debt settlement scams? Bankruptcy takes a stand against this sort of fraud. It provides a legal way for consumers to get relief from their debt—and protects them from harassing creditor calls, wage garnishments, and other legal actions taken by creditors. Before deciding that debt settlement is an option for you, you would be well-advised to find out the truth about bankruptcy and how it might be the best—and safest—way to get relief.