A Roll of the Dice: Debt Settlement Still a Risky Strategy for Debt-Burdened Households
33 Pages Posted: 1 Feb 2014
Date Written: November 1, 2013
Debt settlement companies purport to offer debt-burdened consumers a way to become debt-free while paying substantially less than what they owe, particularly on their credit cards. Updates to the Federal Trade Commission's Telemarketing Sales Rule in 2010 improved consumer protections by instituting a ban on the charging of fees in advance of settling a consumer's debt. However, using data reported by the industry's trade association, we find that debt settlement is still a risky strategy and often leaves consumers financially worse off.
Keywords: debt relief, debt settlement, credit card debt, bankruptcy, debt management plan, credit counseling
Suggested Citation: Suggested Citation