Hint: When you see or hear someone state “We can eliminate over 80% of your debt within 24 hours…run the other way.
In today’s era where unemployment is high and rising credit card delinquencies are now par for the course, BEWARE of the promises you hear from debt settlement advertisers. A lot of it “sounds good,” however it may sound too good to be true. Today I will touch on just a few of the items you should be aware of when shopping for a truly good debt settlement company that can help you get out of debt for good!
That is why we have written a second article simply called credit card debt help 2.
1.) Anyone can negotiate their own credit card debt down.
This is very true. If you have a legitimate hardship and you truly cannot afford to pay back your creditors, there is a good chance the credit card companies will try and work out some type of payment plan with you. In addition, they may try to steer you into some type of debt consolidation program. You definitely do not want a consolidation plan, as you will end up paying off the entire balance. However you will never get your debt lowered like a professional negotiator can.
2.) The money I send into a debt settlement company is 100% safe.
False. You should never send money directly into a debt settlement company. Your money should be going into an FDIC insured bank account in which you have total control over. Most debt settlement companies have third-party vendors they work with to ensure your money is safe. If they do not…stay away from the company at all costs.
3.) Using a debt settlement company does not cost a lot.
It depends. What you are looking for is a debt reduction company that is “incentive-based.” In other words, the company only gets paid on how well they lower your debt. If the company is able to get you a 30% settlement on your debt of $10,000 (or $3,000), they should earn more money than if they only got you a 50% settlement (or $5,000) in this example; they should be rewarded for doing a better job. At Nationwide Debt Reduction, our negotiators earn 25% of the dollar amount they save you. In other words, there is an incentive for us to the best job of lowering your debt as we can. If the company is willing to just accept any offer from a creditor, again why bother with them.
4.) Debt settlement does not affect my credit score.
False. When you sign up with a debt reduction company, you are electing to put your money into an escrow or dedicated account versus making monthly payments to the creditors. By doing so, the creditors will report to the credit bureaus that you are not making payments to them. This has a very adverse affect on your credit score. Anyone that tells you otherwise is flat out lying to you.
5.) When I have completed the program I will be completely debt free.
True. That is as far as your unsecured debt is concerned. You may have secured debt you still owe on, such as a home, a car/truck, a boat, student loans etc. However, as far as your unsecured debt (credit cards, personal loans, medical bills etc.) are concerned, yes you are completely debt free.
6.) Why not just file for bankruptcy than bother with a debt settlement company.
There are a number of reason why hiring a debt settlement is the better option than filing for bankruptcy. The first of course is the moral obligation you made when you signed up for the credit card. You agreed to pay the company back. If you file for bankruptcy you are not fulfilling your moral obligation. As a Christian debt settlement company, we would almost always advise our clients and prospects to take the debt settlement route. Second, a bankruptcy will stay on your credit report for ten (10) years. Using a debt settlement company, you might be able to get out of debt in three years or less. Your credit is not completely ruined. Conversely, all of your creditors will now show that you have a zero ($0.00) balanced owed on those accounts. That should be your ultimate goal from the beginning.