Posted : Feb - 17 - 2012 @ : 3:16 pm | Filled under: Debt Consolidation
Can anyone tell me if I can terminate a contract with a debt settlement company and not have legal issues with the company.
Written by - Settle Credit Card Debt
Tags: Company, contract, Debt, Settlement, terminate
Probably not without a financial penalty
Your first notion should be to READ the contract you signed to see what termination would cost you.
Actually, you should have read the contract FIRST before signing.
Just to clarify, you couldn’t afford your bills so you hired a debt reduction company whom you now owe money and do not want to pay?
You need to read the terms of the contract that you signed with the debt settlement company to find out. It should detail the required process (notifying them in writing, etc.) and any penalties that you would owe for terminating your contract with them. Also find out how and when you can recover any funds that have accumulated in the trust account (if they set one up on your behalf) that your payments to them have been funding. Make sure to save copies of everything you both send to them and receive from them if you decide to move forward with termination, and using certified mail is usually a good idea as well.
It isn’t at all unusual for consumers to drop out of their debt settlement programs. It can be a very stressful process that guarantees you nothing because it relies on negotiation with your creditors, and the results of any negotiation process can never be guaranteed. The only thing that you know will happen for sure with debt settlement is that your credit will be damaged. Some settlement companies will do nothing other than take your payments for a period of time while they wait for your funds to accumulate, and also for your accounts to reach a point in time when your creditors are more likely to want to negotiate on the amount you owe them.
It can be difficult waiting for this all to take place while nothing is seemingly being accomplished toward actually settling your debt, especially if you are getting harassing collection phone calls and receiving subpoenas to appear in court regarding your unpaid debt. This is why many consumers decide to use credit counseling instead of debt settlement to solve their unsecured debt problems. Also, credit counseling will not do any credit score damage.