Debt Settlement, debt negotiation, and debt consolidation, are terms used by firms who charge fees to negotiate lump sum settlements with credit card companies. Regrettably, these companies do a much better job of eliminating your worries with a false sense of security than they do of eliminating your credit card debt problems.
Debt settlement firms charge too much for their services for the average consumer debtor to be able to afford to pay off a reduced-balance credit card debt before it charges off and is sold. They want $1800-2400 to settle $12,000 of debt. And they want to be paid first! They advise you to stop making credit card payments and to pay them instead, saving money in their account for an eventual settlement.
Debt settlement firms do not deliver what they promise, according to MSNBC. Some banks will not even work with debt settlement firms, according to the Wall Street Journal.
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.
Credit card companies sell off their bad debt to junk debt buyers for 10 cents on the dollar. While, some consumers could still be unwittingly paying money into a settlement fund for the original creditor, it is better to demand the return of that money and to fight off the collection efforts of junk debt buyers with consumer protection laws like the Fair Debt Collection Practices Act, according to the Credit Card Debt Survival Guide. That is because the unsettled portion of the debt will simply be sold to another junk debt buyer for further collection.
Consumers should attempt lump-sum debt settlement as a means of eliminating credit card debt on their own rather than through a debt settlement firm promising too much. But, they must be ready to present a strong need-based case to their credit card companies, according to the Credit Card Debt Survival Guide. - 31377
Debt settlement firms charge too much for their services for the average consumer debtor to be able to afford to pay off a reduced-balance credit card debt before it charges off and is sold. They want $1800-2400 to settle $12,000 of debt. And they want to be paid first! They advise you to stop making credit card payments and to pay them instead, saving money in their account for an eventual settlement.
Debt settlement firms do not deliver what they promise, according to MSNBC. Some banks will not even work with debt settlement firms, according to the Wall Street Journal.
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.
Credit card companies sell off their bad debt to junk debt buyers for 10 cents on the dollar. While, some consumers could still be unwittingly paying money into a settlement fund for the original creditor, it is better to demand the return of that money and to fight off the collection efforts of junk debt buyers with consumer protection laws like the Fair Debt Collection Practices Act, according to the Credit Card Debt Survival Guide. That is because the unsettled portion of the debt will simply be sold to another junk debt buyer for further collection.
Consumers should attempt lump-sum debt settlement as a means of eliminating credit card debt on their own rather than through a debt settlement firm promising too much. But, they must be ready to present a strong need-based case to their credit card companies, according to the Credit Card Debt Survival Guide. - 31377
About the Author:
Matt Highlander researched the Credit Card Debt Survival Guide. Learn about debt settlement and legal nonpayment strategies for eliminating credit card debt. Matt Highlander is a contributing writer.
