In Parts 1, 2 and 3 of this discussion on what exactly a debt negotiation service must disclose to you prior to you enrolling in their service, we talked about fees, saving money and how long the program would take. (Here is a link to the beginning of the discussion on debt settlement law disclosures.) In Part 4 (below) we'll take a look at what debt negotiators must disclose if they require you to stop paying your creditors once you enter their program.
As I have said many times, hiring a debt negotiation service is only appropriate for you if you are experiencing some form of financial hardship that makes it next to impossible to continue paying your creditors on time, or at all. Debt settlement is not meant for people who have the ability (either now or after putting in some hard work to get on a budget etc.) to pay off their unsecured debts but just don't "feel" like it. To put it more bluntly, debt settlement should only be used as an alternative to filing for bankruptcy, not as a vehicle to reduce the amount of debt you owe because your too lazy to pay it back.
If you are considering seeking the help of a debt negotiation service, there is a strong likelihood that you have either stopped making payments to your creditors, or at the very least have missed some payments along the way. Even if you are current with your payments, if you are experiencing financial hardship, there is a good chance that this won't last long. Regardless, you should know that in order for the debt settlement process to work, you must stop paying your unsecured creditors once you begin the program.
Your creditors will see no need to negotiate a settlement if they are still be paid on time. So if a debt negotiation company does require you to stop paying your creditors as a condition of entering their program, they must disclose to you the potential consequences of doing so, ie...
In order to make sure that you are actually saving money to make
future settlement payments (and to pay their fees when you do) a debt
negotiation service may require you to deposit money into a
dedicated bank account once you enroll in their
program. To learn more about what they need to disclose to you
regarding this account, click