Got an email today from “Ray.” Ray, in Woodbridge, is working with an outfit called Consumer Recovery Network. I never heard of them but looked into it. Wow, the first thing I saw I liked. Consumer Recovery Network says their fee is only 15% of the amount they save you. That's totally different that Freedom Debt Relief, who charges 25% of the whole debt, NOT just the amount you save.
But Consumer Recovery Network got Ray into the same problem most people have, when they try debt settlement. Ray got sued, by Discover, who is the fastest bank in America to sue.
The problem with debt settlement is that the creditors do NOT wait in line while you settle with the other banks first. Some companies settle and some companies sue. That will happen just about every time.
Why do people fall for this? Some people aren't eligible for filing bankruptcy. (Too soon after a previous bankruptcy can be one problem.) But most people are afraid that bankruptcy will ruin their credit.
The truth is bankruptcy is better for your credit than these debt settlement outfits. Why, because Chapter 7 bankruptcy is done and over; and you are on your way rebuilding your credit. With debt settlement while you settle for one creditor the others, even if they decide NOT to sue for some reason, keep putting bad credit on your report. If you take three years to settle your debts, that's three more years of bad credit you put on your report. Why do that? If you filed Chapter 7 bankruptcy, in three years you'd have as good a credit score as you've had in your life.
(Here again I like Consumer Recovery Network compared to Freedom Debt Relief. Consumer Recovery Network says don't try it unless you can raise half of the total debt in 12 to 18 months. There is some chance, if you can raise money that quickly, that you can settle with everybody before they sue. Freedom Debt Relief seems to presume they are still accepting settlement offers in the third year, and that's just not realistic.)
PS When trying to decide if an outfit is a scam, there are two things you should always look for. First, do that have the pictures of the people in charge? It's a normal human reaction to trust someone you can see. So every professional business should show you pictures of the person in charge, unless for some reason they don't want to. Consumer Recovery Network does NOT show you anyone's picture. That's suspicious. Second, see if they have a real location. If the address they give you is just a mail drop, like a UPS Store, then know know that's not really where they are. Sure enough, the address listed for Consumer Recovery Network, is a UPS Store.
