Considering Debt Settlement? What You Should Know

Your credit card bills are stacking up and for whatever reason you don't have the means to pay the debt. You definitely have choices when you are in this predicament. You can choose to do nothing and hope for the best. Unfortunately, this can cause you a bunch of headaches because creditors will pursue you with unrelenting fervor. When the creditor gives up, they will generally pass the account over to a collection agency. Their pursuit is even more relentless because in most cases they have purchased your account. If you choose to do nothing, prepare yourself for many sleepless nights. There are alternatives that are less stressful and that can get you out of debt.

A better alternative to doing nothing about debt is one that benefits both you and your creditors. Negotiating a debt settlement plan with your creditors can help you dig yourself out of the hole you're in. How a debt settlement works is simple. You inform the creditor that you want to pay the debt, telling them exactly how much you can afford. The creditor accepts or rejects your payment plans and you begin making payment. If you have debt of more than $5, 000 you may think it would take years to pay off the debt. Actually, the amount of your debt probably includes late and over-the-limit fees, and other charges. Creditors will often work with you and may reduce or completely eliminate these charges. This can significantly lower your balance. If your account is associated with a high interest rate, it is possible that the creditor may also lower this amount for you.

You have choices when you consider a debt settlement. There are companies in just about every major city that offer debt settlement services. These companies do all the legwork for you. You sit back and save your money and when instructed to, begin making payments towards your debt. While you are saving your money the debt settlement company negotiates the plans for you. Independent companies that perform debt settlement services don't do so for their good health. They will generally charge you an initiation fee. Depending on the company, your monthly settlement payment may include a fee as well. Be prepared to do some research if you choose to work with one of these companies. There have been reports of scams.

A more secure and less expensive method for debt settlement is to go through a consumer credit counseling agency. Of these, Consumer Credit Counseling Service (CCCS) is the most well known. This is a non-profit agency whose main focus is to help people get out of debt. CCCS offers a Debt Management Program (DPM) that works similar to a debt settlement. Depending on the office in your area, you may or may not have to pay a fee. If you do it is typically very insignificant. An advantage of using CCCS is that they will help educate you about financial matters.

An even cheaper way to initiate a debt settlement is to contact your creditors yourself. Many people are unaware that they can negotiate with their creditors. You don't have to seek professional assistance. There are a few ideas you want to keep in mind if you decide to proceed on your own. Make sure that the payment you agree to is what you can actually afford. Once you and the creditor agree on a debt settlement plan, it is a good idea to get the terms in writing. Many creditors will generate a letter detailing the agreement, but if they don't', simply type of the terms and send it to them certified mail, requesting their signature.

Sound good so far? Before you start envisioning yourself debt free, it's a good idea to consider the pros and cons of debt settlement. On the positive side, you don't have to worry about the annoying calls from creditors. Since you agree to a specific plan of action for your account they have no reason to call you. Another good point for debt settlement is that the terms are based on what you are able to pay. You design a budget and determine what you can afford. This also relieves some stress since you're not stretching to pay your bills.

There are some disadvantages to debt settlement. Although you establish a payment plan with creditors, there is the possibility that they will report your account as "Not Paid As Agreed," which is viewed as negative information on your credit report. This information can remain on your credit report as long as seven years. While you are making payments in the plan you should not use your credit cards or obtain additional credit. In addition, depending on your debt you may be in the plan for up to two years.

James Duggan is an author,internet marketer and membership consultant for Financial Freedom Society Inc. http://www.ffsi-rq.com For more information on debt consolidation,personal finance,debt and credit card help visit: http://www.fix-a-debt.com

---

Dangerous Debt Consolidation Loans

On the surface, debt consolidation loans offer cash-strapped consumers some... Read More

Credit Cards Debt Consolidation

Consolidating credit card debt is never easy. Too often people... Read More

Debt Consolidation Makes Sense Only with Low Interest Rates

Credit that cannot be managed or is not being repaid... Read More

Debt a Glossary of Terms

Bankruptcy - Having been legally declared financially insolvent. There are... Read More

Best Debt Reduction Service

There was a time when incurring debts was looked down... Read More

Consolidate Your Credit Card Debt

With the popularity of plastic money in the present age,... Read More

Open the Cash Vault Inside Your Home

Believe it or not, many people do not understand equity... Read More

Does Working With a Credit Counseling Organization Hurt Your Credit Score?

Credit counseling organizations do not lower your credit score when... Read More

Shocking Facts - What Debt Settlement Companies Dont Tell You

If you're thinking about using a debt consolidation or debt... Read More

Debt Consolidation Primer ? Four Things You Can Do to Get Out of Debt

Problem debt is rampant throughout America. In addition to mortgages... Read More

Is A Debt Consolidation Loan Your Best Option?

For many people the lure of easy credit has taken... Read More

Moving Debt Between Cards Can Save You Money

If you're like most people, you have plenty of credit... Read More

How Do I Know a Good Credit Card Debt Reduction Strategy When I See It?

Credit card debt reduction is an important part of the... Read More

When Your Bills Are Piling Up Here Are 6 Different Ways to Consolidate

When it comes to debt consolidation some people dream of... Read More

Debt Consolidation Refinance Loans - A Great Way To Lower Your Bills

For millions of homeowners, refinancing is the perfect way to... Read More

Credit Counseling ? Get in Line Now to Avoid the Upcoming Rush

Credit counseling is a valuable service for consumers who have... Read More

Reducing Credit Card Debt

One of the easiest "things" that can happen in life... Read More

Finding the Consolidation Loans that You Need

Consolidation loans can be very useful in a number of... Read More

Debt Consolidation ? How to Protect Your Credit Accounts from Theft

Last week, a security exploit at CardSystems Solutions, Inc, a... Read More

What is a Debt Consolidation Loan?

If your objective is to reduce interest rates and lower... Read More

What You Need to Know About Debt Consolidation Loans UK

Should you find yourself over your head in debt, you... Read More

Debt Consolidation ? Can You Negotiate with Your Credit Card Company?

The average American household has nearly $10,000 in credit card... Read More

Debt Consolidation Company and Companies

Debt consolidation companies have dotted the debt solution landscape as... Read More

Debt and New Spirituality

Overcoming the stigma of being in dept, grow in self-confidence... Read More

Debt Consolidation for Homeowners: Saving Grace for Inept Borrowers

You cannot understand the importance of being a homeowner until... Read More

Debt Consolidation Solution

Debt Consolidation is a solution that solves your debts. Debt... Read More

Money Problems?

You're not alone. Many people face a financial crisis some... Read More

What Your Mama Never Told You About Debt Consolidation Services

When someone is extremely deep in debt, and he or... Read More

Going Debt Consolidation Way!

We are aware of the fact that it is easy... Read More

Debt Consolidation Mortgage - Decode Its Apparent Complexity

Someone great once said that 'if it isn't the sheriff,... Read More

Shake off the Chains: Credit Card Debt Elimination is Easier Than You Think!

Feeling like you're on the brink of financial disaster? You're... Read More

Debt Consolidation: Its all in the Planning

If you're like thousands of other people who find themselves... Read More

Online Debt Consolidation Services - Lower Your Monthly Payments Now

Consumers looking for a way out of debt may want... Read More