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Credit Card Lawsuit Information: Misinformation About Card Debt Settlement

Facing a possible credit card lawsuit? There is a way to prevent the case from going all the way to the court. Settling the case out of court not only help save money on both parties, it will make the situation less complicated as well. However, because there are many misinformations about settling debts out of court, we set the facts straight on some of these myths:

Myth: Debt settlement companies should be trusted.

While there are many legitimate debt settlement companies out there, some of these companies are known for fraudulent activities. Because there is a large sum of money involved in this particular situation, many scammers masquerade themselves as legitimate debt settlement companies and they take advantage of the profits they could get from consumers. These companies often earn profits from the total debt forgiven by the creditors.

If you are looking for a debt settlement company to avoid a possible credit card lawsuit, avoid service providers that require an upfront fee. Note that there are cases wherein fraudulent debt settlement companies use their clients’ personal information for unlawful practices so make sure to work only with companies that are insured by the Federal Deposit Insurance Corporation.

Myth: Your Creditor Score Will Not Be Affected

Many service providers tend to give less than realistic promises in order to do business with clients. One such promise is that the settlement plans will not affect the debtor’s credit score. The fact is, a person’s credit rating is out of their hands. Any late or missed payments will affect your credit score. If you are approached by a service provider with a promise that your credit rating will not be affected by their settlement plans, it’s best to move on to other companies that can give you realistic expectations.

Myth: All credit card companies will accept settlement offers

The short answer is no, not all credit card companies will accept debt settlement offers. They are not obliged by law to take the offer so they can refuse any settlement plans at any given time and file credit card lawsuit even if you offered them a settlement.

Myth: You can settle credit card debts at no cost

If you can settle the credit card debt on your own, there’s no need to pay for professional debt settlement services. However, if you obtained assistance from a third party company, you will pay a charge and service fee for it. Although the debt could be settled at a reduced total, the forgiven debt is taxable so don’t believe it when you are promised that the debt will be settled at no cost.

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