Understanding the truth about debt settlement and how it works..

There's been some bad publicity about debt settlement and how it works. Suze Orman had an entire segment on her show about how debt settlement companies are bad and that you can do it all your own, so there's no reason to pay someone else.

She went on to give an example that if you have a $10,000 credit card debt you could get it paid off for $7,000 if you're 90 or more days late. Well suze is almost accurate, she really should have done a little more research beforing saying things that she clearly has no experience in. A debt settlement company more than likely would get that debt paid off around $3000 - $4000 and then charge you $1500 for the service, so you'd pay a max of $5500. Which would save you $1500 more than the Suze Orman debt settlement plan, plus a lot of time and the headache of dealing with the nasty collection agents.

Debt Settlement companies do actual provide a legitamate service to consumers that are having a hard time keeping up on their monthly payments. And when that's the case, are you able to come up with $7000 or even $5500 on your own to get these accounts paid off? If yes, then you should absolutely do it on your own. Otherwise, give us a call and we'll help you.

There are a few factors that determine the amount in which one can settle a debt. Number one and most important, who's the debt with? Which creditor? Some creditors will settle as low as 20% others wont settle for less than 80%. The average american consumer doesn't know which creditors will accept what, debt settlement companies work with these creditors everyday and know what is an acceptable amount.

Number two, The original debt amount makes a difference as well as far as the percentage is concerned. A debt of only $500 to $1200 is not likely going to get a large percentage discount, maybe 50% at best. However the same creditor with a larger balance, let's say $5000 we might be able to pay off around 25% to 30%.

Another very common question ...

Will debt settlement hurt my credit score? The answer is, YES. What you need to ask yourself is, what's more important, my credit score or being debt free? I'll give you two scenarios and you tell me which place you'd rather be in.

Option 1) You do nothing to restructure your debt and continue paying those outrageous interest rates only making the minimum monthly payments or just above. Take a look at your recent statements, it tells you how long it will take to pay off, if you're only making the minimum payments. More than likely it says 10 - 20 years. Had you known that when you signed up for the card, would you have gotten it in the first place? Most likely not.

Option 2) You enroll into a debt settlement program, the monthly payment are lower than your current payments and are manageable, however you have a poor credit score. But, All your debts are completely paid off in 3 years and now if you'd like you're able to repair and rebuild your credit score since you now have No Debt.

Another question that you should ask yourself is, what do i really need a good credit score for anyway? Other than getting yourself further into debt there's not many situations that you actually need a high score.

Give us a call or start online to get your free debt settlement quote. Keep in mind that we also offer a debt consolidation program as well and the terms and conditions of the two are very different.