There are so many debt settlement firms advertising their services that we take their claims for granted. Sadly, when they promise to eliminate credit card debt, they deliver little or nothing for the money they have collected from already stretched consumers.
Debt settlement firms charge too much for their services for the average consumer debtor to be able to afford to pay off a reduced-balance credit card debt before it charges off and is sold. They want $1800-2400 to settle $12,000 of debt. And they want to be paid first! They advise you to stop making credit card payments and to pay them instead, saving money in their account for an eventual settlement.
According to the New York Times, creditors will not negotiate reduced balances with consumers who are still making monthly payments and balances on credit cards with missed payments swell with interest and fees. The Wall Street Journal reported that some major creditors, including American Express Co., say they won't even work with debt-settlement companies. Yet, debt settlement firm's fees are all non-refundable.
Due to Federal Reserve regulations, credit card companies write off their bad debts after six months. The difficulty is if an indebted consumer cannot save enough money with the debt settlement firm to settle the debt within six months, then they could be faced with bad credit, collection agencies and lawsuits.
Credit card companies sell off their bad debt to junk debt buyers for 10 cents on the dollar. While, some consumers could still be unwittingly paying money into a settlement fund for the original creditor, it is better to demand the return of that money and to fight off the collection efforts of junk debt buyers with consumer protection laws like the Fair Debt Collection Practices Act, according to the Credit Card Debt Survival Guide. That is because the unsettled portion of the debt will simply be sold to another junk debt buyer for further collection.
When it is all said and done, DIY-do-it-yourself is the way to settle credit card debt for reduced lump sums. That way the consumer has control of the situation and a better chance of eliminating their credit card debt. - 29969
Debt settlement firms charge too much for their services for the average consumer debtor to be able to afford to pay off a reduced-balance credit card debt before it charges off and is sold. They want $1800-2400 to settle $12,000 of debt. And they want to be paid first! They advise you to stop making credit card payments and to pay them instead, saving money in their account for an eventual settlement.
According to the New York Times, creditors will not negotiate reduced balances with consumers who are still making monthly payments and balances on credit cards with missed payments swell with interest and fees. The Wall Street Journal reported that some major creditors, including American Express Co., say they won't even work with debt-settlement companies. Yet, debt settlement firm's fees are all non-refundable.
Due to Federal Reserve regulations, credit card companies write off their bad debts after six months. The difficulty is if an indebted consumer cannot save enough money with the debt settlement firm to settle the debt within six months, then they could be faced with bad credit, collection agencies and lawsuits.
Credit card companies sell off their bad debt to junk debt buyers for 10 cents on the dollar. While, some consumers could still be unwittingly paying money into a settlement fund for the original creditor, it is better to demand the return of that money and to fight off the collection efforts of junk debt buyers with consumer protection laws like the Fair Debt Collection Practices Act, according to the Credit Card Debt Survival Guide. That is because the unsettled portion of the debt will simply be sold to another junk debt buyer for further collection.
When it is all said and done, DIY-do-it-yourself is the way to settle credit card debt for reduced lump sums. That way the consumer has control of the situation and a better chance of eliminating their credit card debt. - 29969
About the Author:
Matt Highlander spent months researching strategies for credit card debt relief. Read the complete 230-page Credit Card Debt Survival Guide
