http://www.primedebtmanagement.com/debt-settlement/n52.html Debt settlement programs seem attractive, but if you are considering debt settlement programs, get the facts first. en-us Sat, 26 Jul 2008 15:00:00 EDT Sat, 26 Jul 2008 15:00:00 EDT Weblog Editor 2.0 While it's true that debt settlement programs can get you out of debt fast, there are pros and cons. Debt Settlement Programs: Speedy Debt Relief or a Big Credit Mistake? On the surface, debt settlement programs sound great. You have a lot of money saved, but not enough to pay off your unsecured debts. So a debt settlement company contacts your creditors to get your balances reduced down to the amount you have saved. As long as you agree to pay your new, lower balances off in full immediately, your creditors agree to this. They figure that if you've contacted a debt settlement service for help, you're close to not paying at all, so getting something from you is better than getting nothing at all. So you pay up and your debt is considered settled. Sounds pretty good, right? So far, yeah. But... Creditors don't like it when consumers participate in debt settlement programs because they lose out on so much money that is actually owed to them. While it's true they jack up their interest rates and tack on huge fees, it generally doesn't add up to as much as what they write off in a debt settlement. As a sort of "punishment," or a deterrent, at least, they will report a consumer's participation in a debt settlement program to the credit reporting agencies, and it will effect your credit the way a late payment does. And if you have five creditors, that's like five reports of late payments, which can seriously mess with your credit. In addition, it's not very likely that the company will want to do business with you again, but that's minimal compared to the damage it can do to your credit. Some consumers view it another way, however. They think having a debt settlement on their credit report is better than having a non-payment--or worse yet, a bankruptcy--on their credit report. We certainly can't tell you if a debt settlement program is right for you or not. That's the job of a debt management company. But what we can do is make you aware of the facts. Sat, 26 Jul 2008 15:00:00 EDT