Debt Negotiation Advice

does debt settlement service which negotiate your total debt down to 40% and get 15% fee an honest service ?

there are many companies that offer this service, they will contact the credit card company that was owed and negotiate the settlement amount up to 40% of the total debt, you pay 15% of the original amount. Is this a real service or is it a scam to hook you in , get 15% of your money then run ? thanks

Public Comments

1. Honestly, I wouldn't use a debt settlement service. I think the settlement places are equally as shady as the zombie debt collectors or any debt collector for that matter. Most of the time, a debt collector will do nothing but threaten you, but you can resolve that by sending a debt validation letter, look here: http://www.creditinfocenter.com/rebuild/debt_validation.shtml I have resolved almost all of my past debts on my own using this method. It's not that I didn't want to pay them when I finally had the money, it was more principal than anything. Debt collectors pay 2-8% of the original amount you owed the creditor to buy your debt, because they buy debt in bulk. Some newer accounts the debt collector might have bought for somewhere between 10-20%, but rarely. So the original creditor doesn't get anything you send the debt collection agency. I negotiated all of my debts to around 50% of the orginal amount. As a matter of fact, I was sued by a collector and because I sent the debt validation letter they didn't show up for court twice and the case was dropped. Read up on it, it may save you some money. Good Luck!
2. You can negotiate your bad credit down. You don't need someone to help you and charge you to do it. I suggest you read The Total Money Makeover by Dave Ramsey. Get on a budget and then use his methods to negotiate with each of your bad debts- individually. Remember, never give a collector access to your checking/savings account and always get the deals in writing.
3. Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money. It is important that you check the background of the company that you sign up with. Make sure they have a god rating with the BBB. Once such company is Freedom Debt Relief (www.freedomdebtrelief.com). You can get a free consultation from a consultant who will weigh your options for you to see if this the solution for you. Always shop around and then go with a reputable firm which gives you the best deal. All the best with your search.