Debt Negotiation Advice

What is the difference between "free" debt settlement counelors and those that charge a fee?

I HAVE BEEN TOLD THE SO CALLED FREE CONSOLIDATION COMPANIES ARENT REALLY AND THEY ARE WORKING FOR THE CREDIT CARD CO. IS THIS TRUE? WHAT IS THE BEST OPTION TO PERSUE?

Public Comments

1. Absolutely NOTHING is free in life.
2. Many times the companies which are "free" are actually loan providers. So although their service is technically free, their goal is to get you to do a consolidation loan through them. This can actually be beneficial to you, depending upon your needs. Usually a consolidation loan means you pay the amount back over a longer period of time. Which means your monthly payments are lower, but the total amount of interest you end up paying by the end is greater. This can get you out of a bad situation for short-term, but you do end up paying for it in the end. My advice, for whatever it's worth, is sit down and figure out your exact financial situation. My method is to do a monthly plan. Write down your "survival" bills and total them up. These are things like rent and food, things you can't do without. Then write down your income for the month and substract your survival bills from your monthly income. This is how much money you have to work with. Next write down all the additional bills you have in a second column, spend some time carefully considering which of these bills you might be able to eliminate or reduce (i.e. do you really need that $45/mo cell phone, or could you go with a PayAsYouGo phone for $20/mo, and do you really need to go out for lunch everyday?). Then list out all the debt you owe in a third column. You need to determine how much you need to pay off per month on each debt. Don't worry so much about what your monthly payments are supposed to be. Instead figure out which debts have the highest interest rates. These are the ones you want to get rid of quickly. Or you could try to refinance those debts, if possible, particularly if the interest rates are really high. If you have significant credit card debt at a high interest rate, i.e. > 15% you may want to do a consolidation loan. Now figure out how much you could afford to pay to get rid of the debt quickly. Pay the minimum payments on the lower rate debts you owe until you get this one paid off. And then, repeat for the next highest interest rate debt. In the end, there is no easy solution. You just have to be patient and not get discouraged and plan your spending carefully.
3. There are not free debt settlement counselors. There are affordable ones though, try this company: $99 a month for up to 10 accounts. http://www.expert-credit-advice.com/debt_settlement_service.htm