By JENNIFER SARANOW SCHULTZ from the December 3rd New York Times
I recently received a “personal and confidential” notice in the mail from the “debt resolution department” at a California law firm offering to help me restructure a debt I don’t actually have (or hope I don’t have) to a lower monthly payment. The letter urged me to call a toll-free number as soon as possible if I wanted to take advantage of the offer.
Such advertisements for debt resolution services are common these days, and government officials and consumer groups have increasingly raised questions about many of them.
In recent years, as consumers have gotten themselves into more debt, for-profit debt settlement, management and negotiation services have popped up to help those in debt lower their payments, interest rates or fees; extend the terms of their loan with new payment plans; or pay off the debt with a lump payment.
But often, according to the Consumer Federation of America, the firms ask for upfront fees without delivering their promised results or don’t disclose what effect the services may have on credit scores or debt collector calls, misleading consumers and leaving them worse off.
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