There are so many debt settlement firms advertising their services that we take their claims for granted. Sadly, when they promise to eliminate credit card debt, they deliver little or nothing for the money they have collected from already stretched consumers.
Their fees, a minimum $1500-2000 on $10,000 in debt make it difficult for settlements to take place before credit card debts charge off and are sold. Their lump-sum settlement programs are standard. You stop making payments on your credit cards and pay that money into an account they have created for you. They take their fees out of that account then they pay your creditors, when, and if, enough money accrues to strike a settlement.
According to MSNBC, settlement firms often promise more than they can actually deliver. They keep their fee whether or not a settlement agreement is achieved.
The problem is most banks charge off credit card debt after six months of non-payment. If you cannot save enough money within six months of starting the program, then your credit card debts could charge off, leaving a seven year negative mark on your credit report. With a charge off and subsequent sale to a junk debt buyer there is no more leverage with the original creditor, the credit card bank, to negotiate away a negative credit report listing.
After the charge off of bad debts the credit card banks sell large blocks of those debts to junk debt buyers for around 10 cents on the dollar. The buyers of this junk debt will then attempt to collect on these credit card debt(s). It is better for the consumer to demand the return of their money and to use consumer protection laws like the Fair Debt Collection Practices Act to fend off, rather than attempt to settle with these scavengers, according to the Credit Card Debt Survival Guide.
When it is all said and done, DIY-do-it-yourself is the way to settle credit card debt for reduced lump sums. That way the consumer has control of the situation and a better chance of eliminating their credit card debt.
Their fees, a minimum $1500-2000 on $10,000 in debt make it difficult for settlements to take place before credit card debts charge off and are sold. Their lump-sum settlement programs are standard. You stop making payments on your credit cards and pay that money into an account they have created for you. They take their fees out of that account then they pay your creditors, when, and if, enough money accrues to strike a settlement.
According to MSNBC, settlement firms often promise more than they can actually deliver. They keep their fee whether or not a settlement agreement is achieved.
The problem is most banks charge off credit card debt after six months of non-payment. If you cannot save enough money within six months of starting the program, then your credit card debts could charge off, leaving a seven year negative mark on your credit report. With a charge off and subsequent sale to a junk debt buyer there is no more leverage with the original creditor, the credit card bank, to negotiate away a negative credit report listing.
After the charge off of bad debts the credit card banks sell large blocks of those debts to junk debt buyers for around 10 cents on the dollar. The buyers of this junk debt will then attempt to collect on these credit card debt(s). It is better for the consumer to demand the return of their money and to use consumer protection laws like the Fair Debt Collection Practices Act to fend off, rather than attempt to settle with these scavengers, according to the Credit Card Debt Survival Guide.
When it is all said and done, DIY-do-it-yourself is the way to settle credit card debt for reduced lump sums. That way the consumer has control of the situation and a better chance of eliminating their credit card debt.
About the Author:
Matt Highlander writes about the many strategies for eliminating credit card debt; some for those who can pay, some for those who cannot pay. Read all about them in the 230-page Credit Card Debt Survival Guide
