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Should I Default on My Payments Like Pathway Financial Management Says I Should Do? – Roxanne

“Dear Steve,

I have 50K in debt. I heard radio commercial for Pathway Financial Management. The guy insisted that I can pay off all debt in 2-3 months and restore good credit in 1-2 years with excellent behavior. He said they can negotiate to have my debt reduced to at least 57% of what I currently owe. So – I can pay same out of pocket amount but retire all debt within 3 years instead of facing this the rest of my life.

All of my debt is with larger banks and he said they do deals with these banks successfully and consistently. It sounds like I can escape my nightmare and start over. I don’t really care if I ever have good credit again. I just want to have money to eat again.

My credit score is 693. I have a lot of this debt because years ago I helped someone who could not take care of them self and they were never able or willing to repay me. I also had a lot of recent expensive vet care costs. I am willing to pay debts off for rest of my life, but lately I have no money to eat for weeks to months.

I am scared. IF this company is legitimate and they can help me negotiate with Bank of America and Chase, then perhaps I can be FREE of this weight in 2-years. Perhaps I can negotiate directly with the banks myself. You must see this t ype of thing all the time, so happy to find your website and hoping for your help/advice. I live very frugally. All of my money goes to debts. I spend only what I have to on mechanic and vet. I don’t buy clothes, I don’t have TV or home phone and I scrimp anyplace I can. THANKS

Should I default on my payments as they advise and ask them to negotiate this debt for me or not? I have found mixed reviews. The last thing I need is to augment this nightmare. Thank you so much if you can advise me here. Alone and struggling.

Roxanne”

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The Answer

Dear Roxanne,

Based on what you told me my opinion is for you to run away from Pathway. Here’s why.

Let’s assume the Pathway Financial Management fee is the average debt settlement fee of 15% of enrolled debt. That means you are going to pay $7,500 for debt settlement services, which will not prevent lawsuits and collection calls, while bankruptcy, which would prevent lawsuits and collection calls, would only cost you around $1,500. And it’s easy to rebuild credit after bankruptcy.

It seems that stuff the salesperson from Pathway told you was information that the FTC warns consumers about.

Avoid any company that promises to settle your debt if it:

  • touts a “new government program” to bail out personal credit card debt
  • guarantees it can make your unsecured debt go away
  • tells you to stop communicating with your creditors
  • tells you it can stop all debt collection calls and lawsuits
  • guarantees that your unsecured debts can be paid off with pennies on the dollar
  • requires that you pay the full fee within the first few months

Source: Federal Trade Commission Releases “Settling Your Debts” Publication

I think you might also be interested in looking at the complaints about Pathway Financial Management.

But I’m confused by one part of what you said. You say that you can be free of $50,000 in debt in a short period of time. Does this mean you have $30,000 in cash sitting around waiting to use to settle? If not, then click here to find a local bankruptcy attorney. For a fraction of the cost your debt problems could be completely gone in months.

You see if you are just barely able to get by now, by the time you pay the Pathway Financial management debt settlement fee, and save the money for settlements it will take far longer than 2 years to do that. If they told you it would be done and over with in two years I find that impossible to believe.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big Hug!

Should I Default on My Payments Like Pathway Financial Management Says I Should Do?   Roxanne
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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