Debt settlement companies promise to settle your debts for "pennies on the dollar", but beware if the offer sounds too good to be true. I have worked with many consumers who have to file bankruptcy after attempting to work with a for-profit debt settlement company. The debt settlement company promises that if you make "payments" to a savings account instead of to your creditors, you will accumulate enough savings to settle your debts for pennies on the dollar. What they don't tell you, however, is that the first 6-12 months of "savings" is actually the debt settlement company's fees!
By the time a consumer pays the fees and starts saving, he has been sued, had his wages garnished or bank accounts frozen by creditors. Also, the late fees and interest charges accrued while he stopped making payments make it impossible for him to get out of the debt without bankruptcy.
New Jersey recognizes the outrageous fees and unsuccessful outcomes of most debt settlement plans and outlaws for-profit debt settlement companies. New Jersey's law makes it easier for me and other attorneys to obtain refunds for consumers harmed by these practices. However, Assemblywoman Grace Spencer (D-Newark) has introduced legislation to make it easier for these companies to operate in New Jersey and fleece consumers. I urge you to contact Assemblywoman Spencer and urge her to withdraw her bill and keep these companies out of our state.
If you have been harmed by a debt settlement company, chances are I can help. Call my office to discuss your options. I offer free consultations.