Debt Settlement Companies

Debt Settlement Companies

What good are debt settlement companies?

It's Settled, Then

What can debt settlement companies do for you that you can't do for yourself? That all depends on the kind of person you are. If you're a hostage negotiator, a salesman or a lawyer, debt settlement companies probably can't do a lot for you that you can't do for yourself. Most debt settlement companies are full of skilled negotiators. They have to be skilled because they have to be able to convince your creditors to knock 60-80% off of what you owe them. After all, if someone owed you $10,000, but they wanted to only pay back $2,000 because of a financial hardship, then consider the debt settled, it would take some convincing, wouldn't it? That's exactly what debt settlement is. But your creditors recognize that if you've reached this point with your debt, chances are they'll never see all their money. At least this way, they'll see some of what they're owed. (This is one angle a debt settlement company will present to them, too--in case they need to be reminded.) However, they're going to want the remaining balance in full and pretty much right away. Again, more negotiation. What if you owe $10,000, have access to $2,000, but your creditors won't budge--you have to pay back at least $5,000? You might need a little time. So they might give you more time. But no more than 1-3 years. It all depends on how skilled your debt settlement negotiator is.

Even if you have to pay it back over three years' time, it's still faster than other debt management programs. Most of the others will take five years, minimum to send your debt packing. If you're still unsure, contact a debt management company and review your options with them.

Credit card debt settlement is the most aggressive form of debt reduction. Within months, many of your debts will be considered closed for a fraction of the amount. While this may adversely affect your credit score, so does being in over your head. Your credit score will improve in time, your finances won't if you are paying 20%-30% interest and never reducing the principal.

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