Debt Settlement Deals Come With Big Risks
NEW YORK (TheStreet) -- On the surface, debt settlement deals sound like an answer to a financially struggling consumer's dream.
You can cut a deal with a lender to pay a lump sum -- usually well below the actual amount of the debt -- and remove that debt from your life forever.
But up to 80% of all debt settlement deals may never close, no matter what the lender or creditor says, and many debt settlement deals leave consumers owing more money.
A study from the Washington, D.C.-based Center for Responsible Lending clarifies the risk associated with the deals, especially when working with third-part debt settlement companies, and concludes that such deals represent a "risky strategy" for consumers that often leaves them "more financially vulnerable."Also see: Bank Savings Low, Americans Dip Into Retirement Savings Also see: 7 Steps to Better Credit for the 40% Who Don't Understand Their Score
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