Credit counselling and debt settlement services
How do debt settlement companies work?
Debt settlement companies will first ask you for all your bills. You then agree to pay a certain amount into a debt repayment account every month.
Debt settlement companies often focus on paying one bill at a time. They pay a bill only when there is enough money in your debt repayment account. Then they wait again until there is enough in the account to pay the next bill. They do not always ask you which bill you think should be repaid first.
If a debt settlement company does not contact all your creditors when they start to work with you, some of your creditors may not know that you are trying to work out a payment plan. These creditors might keep bothering you or hire collection agencies to collect what you owe them. The debt settlement company may or may not handle calls from collection agencies for you.