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The Law Office Of Barry R. Levine

100 Cummings Center
Suite 327g
Beverly, MA 01915

Call Us Now For A Personalized Case Evaluation

(978) 355-1177

Call Us Now For A Personalized Case Evaluation

The Law Office Of Barry R. Levine

The fee charged by the debt settlement company is usually determined by how much debt you have and what they feel they are dealing with respect to your financial situation, The payments you make are in anticipation of them settling your claims for less than 100 cents on the dollar. Their fee is also included in that payment. I’ve heard of instances where they file court papers on behalf of their clients without any authorization and other antics that should not occur, but they have no ethical constraints as do lawyers. I happen to know that people don’t like to contemplate bankruptcy much less file it, but it’s a much cleaner way to deal with things than winding up paying a fee and perhaps getting some claims settled. In a perfect world, and I am too cynical to even contemplate a perfect world, the debt settlement company will settle your claims for 20-25% on the dollar and life will go on. Unfortunately, that is not always the case. If you are having difficulty making the required monthly debt settlement payments, the way to change the agreement is to consult with a bankruptcy attorney and stop making your payments.

 

What Happens If Someone Wants To Discontinue Their Agreement With A Debt Settlement Company?

 

If someone wants to discontinue their agreement with the debt settlement company, that’s the problem. They do everything in their power to keep you on board. To what end, if it is not working out. As I noted above, those in a debt settlement plan usually start getting frustrated with the lack of any activity. By the time that I’ve encountered them, they have decided to file bankruptcy. What may be difficult is terminating those easily set up automatic payments. Trying to stop those payments is no easy venture. Oftentimes, you have to close the account that is being used to fund the payment. Leaving no money in the account may be another way to go, but your bank may allow certain payments to go through and charge you for the privilege. Of course, the debt settlement company may just allow you to opt out. If they do not take this route, the best if to close the account that you are using.

 

Does It Act Almost Like Wage Garnishment Where They Have Automatic Access To It?

 

To the extent that you are authorizing automatic payments to a creditor, yes. The major difference is that a wage garnishment is granted by an order of a court of competent jurisdiction while you have voluntarily set up the automated payment. Consequently, the companies can take whatever you’ve authorized, but they can’t take more. The amount that can be taken in a wage garnishment is controlled by statute. A more prudent way to proceed is to control the timing and release of your monthly payment. Most banks allow you to set up automated payments to any particular party through their online banking system. Doing it this way will allow you to stop making payments and opt-out of the program However, I know from personal experience that they will not stop unless they have to, which can create far-reaching issues for the client. Suppose the debtor is not satisfied with their current situation after months of working with the debt settlement company. In that case, the best thing to do and the path of least resistance is to call up whatever debt settlement company they have an agreement with and find out how to discontinue the automatic payments. Maybe they’ll be very accommodating, say no problem, and just shut it off. But if not, then the alternative is going to the bank and tell the bank the situation. Many bank employees know about the situation and close your account and reopen a new one. It’s a pain, but it’s well worth doing. Of course, if you don’t want to close the account, leave no money in it, but then it becomes a question of how many times your bank got issued for an overpayment if they decided to cover the withdrawal. 

 

What Alternate Options Are Available For Debtors To Settle Their Debt?

 

There aren’t many. In reality, the only choices for trying to settle debt is either attempt it through the services of a debt settlement company, an easy alternative but with no guaranties that your debts will be settled, or through the filing of a Chapter 7 bankruptcy, in which you will discharge all of your dischargeable debts. Of course, if you have a wealth uncle or inherit a small fortune, that may be an approach you may consider. There are other potential alternatives, but most of them require having money to quickly pay a settlement and, frankly, it you had money, you wouldn’t be in this situation in the first place.

 

Additional Information On Debt Settlement Companies

 

You can set up the plan to direct the payment to come out of your account every month, which happens automatically, or you can do it every time you need to make a payment. The real downside in my opinion is you are authorizing somebody else to dip their hand into your account and take money out of it. As I have previously stated, being able to stop making the automated payments is often tricky. My rule of thumb when you are dodging creditors is never to keep more money in your account than you can afford to lose. You will thank me!

 

For more information on Debt Settlement Companies, an initial consultation is your best next step. Get the information and legal answers you’re seeking by calling (978) 355-1177 today.

Barry R. Levine

Call Us Now For A Personalized Case Evaluation
(978) 355-1177