A debtor has been contacted by the Federal Debt Assistance Association, and has been asked to sign a contract that will reduce $40,000 in credit card debt down to $3,500. That sounds too good to be true. Can the offer be real?
A debtor has been contacted by the Federal Debt Assistance Association, and has been asked to sign a contract that will reduce $40,000 in credit card debt down to $3,500. That sounds too good to be true. Can the offer be real?
The Federal Debt Assistance Association is a private company with an official-sounding name, that does not have any association with the government. They seem to fall into the broad category of companies that offer "credit repair" services, disputing debts and hoping that the creditors don't validate information about the debt with credit reporting agencies. As they don't appear to actually negotiate settlements of debts with creditors, be careful about what the contract says. For example, is it simply promising that debts will disappear from your credit report, as opposed to actually no longer be subject to collection and, if so, for how long? Given that you can still be sued for a debt or be the subject of debt collection for a debt that is not on your credit report, if that's what they're offering you have you ask yourself: Even if they succeed, is it worth the money?