Dave Ramsey is a money-management expert, national radio personality and best-selling author. His column appears regularly in American Profile.
I've got about $10,000 in debt, and recently I signed with a debt settlement company. They've already drafted two payments from my checking account, but the plan itself doesn't take over until the third month. I'm already wondering if I've made a big mistake.
—Barbara in Birmingham, Ala.
Dave Says: Yes, you have. My experiences with these kinds of companies have shown me that 90 percent of them are complete con artists. Nine percent are simply incompetent, and maybe, if you're lucky, 1 percent of them are on the up-and-up. According to the Federal Trade Commission, debt settlement organizations are at or near the top of the list of the most complained-about consumer companies. You can go to the commission's website, ftc.gov, and see for yourself all the complaints that have been filed, as well as the number of attorneys general across the nation who have filed cases against these businesses. It's just a horrid industry!
You need to cut this deal off immediately. Don't give them another dime. I wouldn't count on them refunding anything to you, either. But if it were me, I'd make plans for taking care of my own debt settlement by living on a budget and making my money behave.
I wouldn't wait on someone else to take care of the stuff in my life, Barbara. And I certainly wouldn't allow myself to be ripped off anymore!