When is debt settlement a good idea?
It’s a common scenario. You find yourself over your head in debt and see an offer like the one pictured here, promising to get you out of debt, fast and easy! Most debt settlement companies are little more than a scam.
The plan is that you enroll in the settlement service for a fee. You then pay the settlement company a monthly fee, with the understanding that the company will in turn, negotiate either a smaller payment or smaller overall amount to be repaid.
Unfortunately, many debt settlement companies tell you to stop communicating with and sending payments to your creditors while you make payments to them. This is, in effect, diverting your debt payments from your creditors and sending them to the settlement company.
This simply causes you to rack up interest and pile on late fees, all the while the settlement company collects a monthly payment.
So, is debt settlement a good idea? For most people, no. In the worst case, debt settlement is a scam. In most cases, debt settlement is just not a good idea.
The reason is that you can do for yourself what the settlement company promises. Call your creditors and negotiate. This is especially effective in the current economic climate. Creditors are taking huge losses, and will make meaningful compromises to get at least some of what you owe back. Tell them you simply cannot pay back what you owe, or at least not at the current monthly payments. Negotiate for a lower payment, or overall outstanding debt amount.
However, some people are so far gone that debt settlement is the only way to go. If you are one of these people, be sure to find a nonprofit credit counselor through National Foundation for Credit Counseling. Their services might be free, but they should cost no more than $25 enrollment and $50 monthly fee.
You may also want to check out how I dug myself out of over $10,000 in debt in 7-steps.
people think that debt settlememt are good but inreality its very bad for the people who are intot he debt settlement scheme
I live by the philosophy ‘If it seems to good to be true, it probably is.’ Especially in this economy, one must beware of all the scams out there. Just don’t spend the money you don’t have. That’s the smartest thing to do.
A useful blog that answers questions about debt settlement is Debt Remedy Solutions. It has
helped me out!
Thanks for sharing this great article! That is very interesting smile I love reading and I am always searching for informative information like this!
You are bookmarked! Many thanks to the author.
Debt settlement online
This is an excellent article. Thanks for the information.
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