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Beware of These Five Debt Settlement Dangers Before Deciding What to Do About Your Minnesota Debt

The phone calls are unrelenting. The demands are unreasonable. You simply cannot repay your debts according to the terms of your loans or credit card agreements. You don’t have the money to give. Yet, your creditors are demanding it right now. A debt settlement company has offered to help you, but can the company be trusted? Will a debt settlement company help make your future better?

 

Debt Settlement Companies are Unregulated and You Should Proceed with Caution

 

Currently, debt settlement companies are not regulated by the federal government. That means that there may be a significant difference in the fees charged and services provided by debt settlement companies in Minnesota and that you should be careful before doing business with such a company.

 

Additionally, you should watch for the following debt settlement problems that could arise:

 

  • High Costs. Some debt settlement companies charge a lot of money for their services.
  • Lengthy Settlement Times. Without regulations, there is no standard time by which debt settlement companies should complete their business with you, and the process may take years.
  • Problems with Your Credit Scores. Your credit scores have likely already taken a hit if you are behind on your payments. However, settling debt for less than you owe, even with the help of a debt settlement company, could further lower your credit scores.
  • Tax Consequences. The difference between what you owe and what you pay may be considered taxable income by the IRS and you may owe taxes on that amount.
  • Wage Garnishments or Other Legal Actions. Creditors may be concerned about working with a debt settlement company and move to garnish your wages or proceed with other legal actions faster than they otherwise would have had you not contacted a debt settlement group.

 

Contact a Minneapolis Bankruptcy Lawyer For Help

 

A Minneapolis bankruptcy attorney will not only advise you of your bankruptcy rights, but will help you understand all of your different financial and legal options so that you can make the decisions that are right for you and your family. To learn more, please contact an experienced Minneapolis debt relief lawyer today at 952.388.2942 or 1.800.619.8991.