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What you should know about credit card debt settlement

Credit Card Debt Settlement And What You Should Know

When it comes to financial nightmares credit card debt is the worst, because it seems like you pay and pay, yet the amount owing hardly goes down at all, causing a great deal of stress. Credit card debt grows quickly and the high interest rates associated with most cards make it very difficult to reduce debt load, which is why when you decide to participate in credit card debt settlement you see results. A realistic expectation is to have all of your debt eliminated within 3 years and you will save 40-60%

When you do settlement on your credit card debt, it means there will be no more nasty letters, no more harassing phone calls at all hours of the day and night, no more interest and fees. Credit card debt settlement is essential if you are serious about eliminating debt from your life.

You can either obtain the assistance of a Debt Settlement company or you can do your own credit card debt settlement. The outcomes will not be the same and you must weigh the options to determine which will be better for you.

If you decide to undertake credit card debt settlement yourself, don’t buy the DIY/ Do It Yourself Debt Settlement Kits.  They are sold for as little as $25.00 and they are full of very general information.  You will learn little and these DIY kits will not help.  The “specialized forms” are nothing more than basic letters you can create yourself.
 
Your first step is to start saving money.  The only way you can settle your credit card debt on your own is to have cash in hand.  Creditors will not setup a payment plan with you; you must pay the lump sum within 3 days of negotiating the settlement.  If you do not have the cash, do not even attempt to negotiate a settlement.

Your second step is to analyz the debt and determine the policies of your creditors regarding settlement on your accounts.  You will not find any published information on the internet, you will have to make contact with your creditors and see if they will tell you their policies.

You should next familiarize yourself with the banking laws and regulations at the state and national level.  Lookup the Fair Debt Collection Practices Act ( FDCPA ) and know this law like the back of your hand.  It is very important to know this law as an expert because you will be able to catch your creditors when they intentionally and unintentionally break the law.

You should not consider any type of balance transfer; this is fraud and you most likely will be caught.  Creditors analyze your accounts if you try to negotiate a settlement and if they see that you recently transferred debt from another bank to theirs, you will create a serious legal problem for yourself.

Next you must understand that you will never be able to settle the debt for a lower amount compared to a debt settlement company.  There is one simple reason for this, creditable debt settlement companies work for hundreds of people at a time.  They are able to group accounts together and settle in bulk.  What that means to a creditor is hundreds of thousands of dollars are at stake during the negotiations.  When debt settlement companies settle in bulk, they are able to get all of their clients an even better savings than compared to settling one account at a time.

For this reason, you cannot expect to achieve better results by trying to settle your debt yourself.  You simply do not have the “buying power” that a settlement company has.  You will end up paying more by trying to settle your credit card debt on your own. 

When a consumer settles the debt themselves, they may be able to negotiate the debt down to about 70% and if you are really good, 60%. Whereas the debt settlement company will be able to at least get the debt negotiated down to 50% and depending on how good they are, maybe down in the 20-40% range.  Even with the fees the settlement company will charge, the debt settlement company will save you more than what you could do and you will not have to deal with the headaches.

If you have less than $7,000 in credit card debt, you should definitely consider settling the debt yourself.  If you have more than $7,000 in debt, or if your accounts are being handled with bill collectors and collection attorneys, you truly need the expertise of a Debt Settlement Company.

If you decide to get assistance settling your credit card debt, a Debt Counselor will explain the options that are available to you and they will also recommend what they feel is your best option.

It is important that you find a Debt Counselor that you are comfortable with and has the experience to help your situation. You should check with a few different companies but look out for those that offer significantly lower payment plans.  When one plan is significantly lower than the others, you need to be leery.  There will be hidden fees typically associated with the backend or even a percentage of savings.  

Watch for scams that offer you instant credit card debt settlement. This just doesn’t happen overnight unless you suddenly find you’ve inherited a nice sum. It’s the old if it sounds too good to be true it is. These are scams so be sure to avoid them and seek out a reputable company. A little research and you’ll be confident with your choice.

Another bait and switch scam common with bad debt settlement companies is charging a percentage of how much they save you.  It sounds good because you think you are paying for better performance.  In reality, you end up paying almost double the service fees.  When you hire a debt settlement company, they have a fiduciary duty to provide you with the best service and settle your debt at the lowest possible percentage.

FH Financial Service has been providing Credit Card Debt Settlement for years and has helped thousands of consumers.  To get a free consultation and to find out if debt settlement is right for your situation, Complete the Debt Elimination form below

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