Debt Settlement & Credit Counseling Companies

[savelikedave]

I thought you could pretty much settle debts yourself. So long as you let them go past due a few months and you have enough money to pay the settlement amounts. Make sure you get any creditor agreements in writing.

[dbstylee]

don't use either, the effect on credit is the same as if you just stop paying the creditors

[CCCFree]

Ok but you do know that Debt Settelment and Credit counseling are two different things. Debt settlement is basically completely halting all payments to your creditors, and Credit Counseling is having a credit counselor break down your spending habits, suggest a budget and then negotiate with your creditors lower rates and better terms.

[naomibatac]

Yes, I agree with CCCFree, you will need debt settlement if you want to one time settle your account and you need credit counseling if you are not able to manage your credit and finances well. However, you should be wise in choosing the right service provider because there are legit and good ones and there are bogus ones. Be wise and be careful.

[Kairon]

Debt settlement, also known as debt arbitration, debt negotiation or credit settlement, is an approach to debt reduction in which the debtor and creditor agree on a reduced balance that will be regarded as payment in full. In debt settlement, the consumer makes monthly payments, out of which the debt settlement company takes its fees; the remainder is put into a "trust" or "special purpose" account.

[Eric80]

There is some great advice given however i do think that this needs to be done before you get yourself into debt- if you are in debt and you feel that there is no return then don't worry because there is! I was one of those people and then i went and spoke to a debt advisor who gave me information on debt consolidation and IVA's debt management plan! it was probably the best this I have ever done and I am now able to manage my finances and I am definitely in a better situation

[flipyourdebt]

Debt settlement can be a good last option before bankruptcy. If you do your homework then you won't get caught in a scam.

[crazyskunk82]

Because the government isn't keeping an eye on everything. They don't have the resources. They can't keep up with every little company that does these things. It's up to people to report these companies so the government can find them.

[esterdsl]

How to avoid being victim of debt settlement scams

There will always be scoundrels waiting for an opportunity to make money off the misfortune of others. The most common scams nowadays are the loan modification & of course debt settlement scams.

You can always do some research and try to negotiate with creditors and lenders yourself - that is the best way to avoid being scammed. However, hiring a reputable debt attorney will increase your chances of having a successful debt settlement.

Make sure the attorney you hire meets this criteria:

1. Referrals
2. Experience
3. Realistic Promises
4. Licensed
5. BBB Member
6. Trust Fund - Your payments should be made out to a trust fund in your name.
7. Ease of Contact
8. Fees should be fair - not outrageous. Free consultations & no up-front fees
9. Insured & bonded
10. FTC Compliance

[Donovan]

companies

Some companies will appreciate your willingness to be proactive about paying off the debt. However, creditors tend to be less willing to negotiate fairly with a borrower. They will come up with a variety of reasons why it just isn’t possible, such as a bad credit score or a high debt-to-income ratio. Some might even say that you can afford to continue with the balance as is because you’ve paid on time in the past, even if you’ve been struggling. The creditor’s goal is to get the entire balance due, as it maximizes their profit.

[hopeangel292713]

I have to disagree that all debt settlement is a scam. Several years ago I went through a company recommended to me by a family member. My spouse and I had both been laid off work and we were struggling to keep up with 3 credit card payments. The debt settlement company consolidated them into 1 payment, and negotiated a lower interest rate so we could pay them off quickly. As long as we made our payments on time our accounts remained in the program, and we paid them off in only a few years.

It truly saved us at a very scary time. A huge benefit for us was that a family member had gone through the program already and was able to vouch for us that it was legit.

ETA: we were never charged a fee to use this service.

[alternativegirl]

There are good Debt Settlement companies out there but be very careful

I am ready to settle this one once and for all.

Consumer Reports, an independent, non-profit, trusted group since the 1930s advises consumers to stay away from debt settlement companies, and in the March 2009 magazine listed them as scams to avoid.

I was on the phone for 12 hours one day looking for help. I wanted to find some that would work with me and was not corrupt. I think it was easier to make comparisons when I could hear the scammers and the credible people back to back. Far more pick pocketers then credibility out there.

I heard that some of the credit card companies own the debt counseling dot org companies,

[alternativegirl]

ETA: we were never charged a fee to use this service.

sounds like you found someone great. How did you find them?

[scott sinfield]

Debt Management

By managing your debts and by that I mean sitting down and looking at what your exact outgoings are and how your income copes with it (if it does at all) you will be abletowork out what you have left once all of the bills have been paid. Once you have an approximate figure you can the look at at what you could cut back on (nights out,takeaways etc) then the money that you save there is the small litte extras that will go towards paying off your debts.

The good thing about doing this is that when you payback one of your debts, lets say for example your car finance you now have even more money to pay off your next debt, and so on. The trick here is to start with your smallest debts first then move on to the bigger ones last such as your mortgage.

Hope this was helpful!

[Pari77]

I wouldnt waste the time or money

If you are asking whether credit counseling companies are good or bad?

In my opinion (I have been doing collections for 16 years), I would say they are not very beneficial if at all. In my opinion, they do not have any more rights that the debtor (and in some cases less) and no creditor has to negotiate or even deal with them.