You may have heard of debt settlement firms before. These are often dubious for-profit companies that promise to eliminate all your debts and wipe your credit report clean — all for a cheap fee. Sound too good to be true? Well, many times it is, and debtors who use these firms often just replace one type of debt with another type of debt, and their headaches only continue. Check out this article, which provides some good reasons why debt settlement firms can be problematic, and read this one about states taking legal action against some debt settlement firms for deceptive practices.
Given that total student loan debt in America has reached $1 trillion and surpassed credit card debt for the first time in history, it’s no surprise that these shady companies are trying their luck with student loan debtors.
Be forewarned: these firms are trouble.