Debt Settlement, debt negotiation, and debt consolidation, are terms used by firms who charge fees to negotiate lump sum settlements with credit card companies. Regrettably, these companies do a much better job of eliminating your worries with a false sense of security than they do of eliminating your credit card debt problems.

Their fees, a minimum $1500-2000 on $10,000 in debt make it difficult for settlements to take place before credit card debts charge off and are sold. Their lump-sum settlement programs are standard. You stop making payments on your credit cards and pay that money into an account they have created for you. They take their fees out of that account then they pay your creditors, when, and if, enough money accrues to strike a settlement.

According to MSNBC, settlement firms often promise more than they can actually deliver. They keep their fee whether or not a settlement agreement is achieved.

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.

After the charge off of bad debts the credit card banks sell large blocks of those debts to junk debt buyers for around 10 cents on the dollar. The buyers of this junk debt will then attempt to collect on these credit card debt(s). It is better for the consumer to demand the return of their money and to use consumer protection laws like the Fair Debt Collection Practices Act to fend off, rather than attempt to settle with these scavengers, according to the Credit Card Debt Survival Guide.

Eliminating credit card debt through debt settlement is best accomplished on a do-it-yourself basis. Consumers must be ready to present a need-based case for a reduced balance settlement, according to the Credit Card Debt Survival Guide.

Matt Highlander researched the Credit Card Debt Survival Guide. Learn about debt settlement and legal nonpayment strategies for eliminating credit card debt. Matt Highlander is a contributing writer.

Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Related posts on loans for people with bad credit:

  1. Christian Debt Counseling Provides Better Debt Settlement If there is one thing that we must avoid in life,with everything we have, it would be debt. It is wise to never get yourself in that position with credit cards and other financial services companies no matter what the amount is. The reason for this is that just about...
  2. Did You Know That You Can Legally Erase 60% Of Your Credit Card Debt Many people who have credit debt have not read the correct information, so they think they have to continually make their minimum payments or a collection agency will call them and in their credit report will suffer. You can now legally and ethically get out of your credit card debt....
  3. Does Debt Settlement help to Consolidate my Debt? Are they the same thing? Is Debt Consolidation Effective in Debt Settlement? Debt consolidation is a process of settling your debt. Although very popular, most people ask if it is an effective method even for people who are already swimming in debt. The straightforward answer to this…...
  4. Secured And Check Card Differences There are lots of differing kinds of mastercards. Some offer rewards, others offer low rates, others are excellent for balance transfers, and some visa cards are even secured against your own funds to help you build credit. Some are just check cards that permit you protection in buying, but aren't...
  5. Debt Reduction Solutions Have you ever wondered what debt reduction solutions are all about? This informative report can give you an insight into everything you've ever wanted to know about debt relief grants....

Tagged with: • • •

Filed under: Credit

Like this post? Subscribe to my RSS feed and get loads more!