Bankers Hate Debt Settlement Outfits

Bankers Hate Debt Settlement Outfits
Bankers hate debt settlement. The seven biggest groupts of bankers all sent a letter to Congress in February 2026 asking for stronger regulation of the outfits doing debt settlement. The bankers says that those settlement plans “take years to complete, if ever.”
Now if you are in financial trouble, the bankers are not your friend. So why am I pointing this out?
The American Bankers Association asks Congress to crack down on debt settlement outfits
Many people who sign up for debt settlement think it’s somehow better or more honest than filing for bankruptcy. But the bankers don’t. So who exactly will think better of you because you tried it? I’ve never met anyone who had an answer to that.
The bankers’ letter sent me to a 2021 study paid for by those settlement people. That study shows that most people who file Chapter 7 bankruptcy clear 90% of their unsecured debts. (Most people who file Chapter 13 clear about 60% of their debts.) And most people who go with debt settlement only settle about half their debts, and only reduce those by about a third!  Finally, only about one person out of four actually finishes the settlement program. That’s from the study those guys paid for.
Conclusion
If you can take care of your personal obligations and pay your debts, pay them. If you can’t, then talk to a bankruptcy lawyer. Nobody is going to respect you more if you try debt settlement first. Not even the bankers.
 
 
 
 
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