When people are strapped with unmanagable debt, some people choose to use a Debt Settlement Company (DSC).

BE VERY CAREFUL IF YOU CHOOSE TO USE A DSC. First of all they are not regulated and second, they are usually front loaded with administrative fees that do not go towards paying off the creditors. In addition, the creditors do not have to participate in the debt settlement program because there is no law that requires them to do so.

Another point of concern is the fact that the DSC requires people to give away their money to the DSC and “trust” that the money will go to pay the creditors. So, the money is given away in the hopes that the DSC will do what they said they would do, which is not always the case.

No matter how much due diligence one does in researching the integrity and honesty of the DSC it still remains that the whole matter is based on trusting that the DSC will do what they promised.

In addition, there is no guarantee that the outcome will be successful because, as previously mentioned, there is no regulation or oversight within this business.

Before giving away your hard earned money to a DSC, please take the time to consult with an attorney, preferably a bankruptcy attorney, to determine if it is in your best interest to use a DSC.

There are too many cases where people pay into the DSC for months, and sometimes years, and then the people find out later that hardly any of the creditors have been paid in an amount that would eliminate the debts that were to have been paid.

One last point. If a person is concerned about improving their credit rating and score because of past due debts, bankruptcy can actually improve the credit score more quickly than using a DSC. The bankruptcy can actually hasten the rebuilding of one’s credit due to the “clean slate” or “fresh start” that a bankruptcy provides. This surprises many people, but it is true.

Again, consult a Phoenix bankruptcy lawyer. And remember, the consult should be free-no charge for getting the information you need to make an informed decision.