Card Credit Debt Negotiation Settlement

There has been considerable debate between two specific debt reducing options: debt consolidation and debt settlement (negotiation). I'm trying to decide which is the best option to select if one wants to reduce their financial debt (specifically credit card debt). I'm sure there's pros and cons to both options, however which is more effective? Please advise.

depends. If you can make the payments and have good enough credit You can consolidate all your debts into one. Pile cash on it till its gone. As long as you are making the min payment as agreed then Your credit will not take a beating.
It would be best just to list your debts smallest to largest and pay off the smallest first while making min payments on the rest. Then after you pay off the smallest take that money and pay the next smallest debt.
Most People will tell you to pay the highest interest first. Interest rate is not the problem. Its the spending. If you work from smallest to largest you will see progress faster which will keep you motivated to move on to the next.

If you cannot make the payments, thats when you have to go with a settlement. It will trash your credit.
I wouldnt use any company that you have to pay. Most if not all of these companies will not pay your creditors for months and then try and settle for less. No special skills. They just dont pay. Even the companies that have the word "Consolidation" in thier name.

Remember if you use a some company and they dont pay your creditors. You, and you alone will still be responsible for the debt. Your creditors will come after you and not the company you hired.

2007-10-30 20:44:07 by Roderick C

www.howtodebtsettlement.com How To Settle Credit Card Debt Yourself www.howtodebtsettlement.com

What are my chances of settling at a lower amount? With over 25% in interest the amount is over $8000. What would be a good target for negotiation? Also the lawfirm involved is about 4 hours away from the court location. If They don't show up, can this be dismissed?

All the answers you need is here..http://www.debt-consolidation-credit-rep air-service.com/forums/index.php

They are counting on you not to answer the summons and get a default judgement. Tell them you want them to verify the debt in your answer. And I mean sign receipts, signed contract asap.....

2007-09-17 21:14:07 by lifeizgud

Price: $9.99

I currently have over $25,000.00 worth of credit card debt from medical bills due to an auto accident that happened a couple years ago. The accident is going to be settled within the next year since I was not at fault, so I will eventually be able to pay off the debt completely. I have contacted the cc card companies to see if they'll lower my interest rate--no luck.

However, I heard about a company that will negotiate my debt with the cc companies & will lower my debt up to 60% (for a fee, of course). Therefore, my monthly cc payments will go down & I will owe less money overall. The downside is that this will ruin my credit rating & it will take 6 months or so to fix it.

Would it be better to do nothing & wait for the settlement to pay off all the debt at once & not mess with credit rating recovery (I want to purchase a home after the settlement)? Or should I do the debt negotiation & go through the process of rebuilding good credit again?

Thanks!
(Only serious answers please)
By "do nothing", I mean still pay the minimum payment every month, but not negotiate the debt with the company. Sorry about the confusion.
I am not going to file for bankruptcy. From what I've seen, this is the worst option for me (other than not pay even the minimum payments). I've seen that it can take 10 years to establish good credit after a bankruptcy.

Don't wast your money on those rats.

File bankruptcy? Go to the clerk of the court and they will give you everything you need. You can get information about it on the web.

Don't wait it only gets worse, look at all your options.

Any other questions?

2008-05-24 15:24:27 by flowerelena

Price: $14.95

I have like 40K credit card bills and want an easy and quick way out of them. I also need to keep my credit in a good shape so i am looking for a program to work with to help me to get red of debts. I interviewed a few debt settlement companies ( http://www.cydebt.com/home/homepage.shtm ) and they told me that they can reduce my debts to 15K and wouldn't mark my credit. So what is the disadvantage of these companies and why everybody thinks that they're rip off. I also can't understand one part... what's will my creditors do if i don't make any payment?

There is no magic bullet to clear one of their debts. If an agency states they can reduce your debt, then all it means is that they will get your creditors to settle for less, charge you a big fee, and it will wreck your credit history for a long time.


Avoid credit repair agencies that charge a fee to improve your FICO score by removing negative, but accurate, information from your credit reports. No one can force credit reporting agencies or lenders to remove accurate information from a credit report. Credit repair companies often take your money without delivering what they promise, or provide only temporary improvements of
your score, sometimes by removing accurate information that will reappear later.

Now on the other hand, a credit counselor can help you to avoid going into default and is some cases there is no fee. They will research your situation and advise you on what is best.

Here is a link to organizations recognized as being legitimate and approved by the FTC and Bankruptcy Courts.

http://www.usdoj.gov/ust/eo/bapcpa/ccde/ cc_approved.htm
Govt approved credit counseling agencies.

Hope this helps you out.

2007-12-20 20:46:47 by blue5349

I am told that I should immediately stop paying my credit card bills to get the attention of the lenders, so they will be more open to negotiations. And I should refer all contact to the debt settlement company. Is this normal?
I'm not behind on any bills right now, but it's looking likely that I will be in a short time.

NO! NO! NO! This will destroy your credit! You don't need these idiots! You can do it yourself.

Please do not consolidate. It is not free, they will lower your payments by increasing the length of time until you are debt free, and you will take a hit on your credit score. Or they negotiate your debt down after telling you not to pay for awhile adding another hit to your credit score. There is a better way.

A. Have a garage sale and sell anything that you no longer need or want.

B.Get a temporary part time job, if you have one, get another.


Here is a plan that can help you. If you work the plan, the plan will work for you:
1. Make a budget. Make the budget a week before you get paid. A budget is not a punishment! It is a tool which will free you from ever having to worry about money again. Put everything in your budget. Especially those annual, biannual, or quarterly bills like car registration, insurance, etc. Give every dollar you are going to bring home the name of where it is going. Add an "emergency fund" category to your budget for 25 dollars and save up until you have 1000-1250 dollars. Your emergency fund will help keep you from getting into new debt because of an emergency. If you can, set up a direct transfer to a savings account for your emergency fund. That way it moves automatically and you don't even have to worry about it. You must cut your spending and live on less than you make.

2.First get current on all of you debts and make no more late payments. Stop using your credit cards immediately. Do not take on any more debt. Credit cards are like quicksand only the death is much slower. Make a list of all of your debts in order of highest interest rate to lowest interest. Use cash only for your spending from now on.

3.Pay the minimum due on all of your debts and then put your extra money towards paying off the highest interest one first. After you get that one paid off, you put the money you were paying on debt #1 (the minimum payment and the extra payment) towards debt #2. That will pay debt #2 off faster. When that is paid off, you put all three payments towards card #3 and that one will be paid off pretty quickly. As an example:

To start :
Debt #1 (highest interest): minimum payment+ extra payment
Debt #2 (middle interest): minimum payment
Debt #3(lowest interest): minimum payment

Debt #1: paid off
Debt #2: minimum payment from Debt #1+ Minimum payment from Debt #2 +extra payment
Debt #3: minimum payment

Debt #1: paid off
Debt #2: paid off
Debt #3:Mimimum payment from card #1+ minimum payment from Debt #2+ minimum payment from Debt #3+ extra payment.

That way, you will get them all paid off, on time, and pay the least interest. It will also help towards rebuilding your credit since you will no longer have any late payments. This works no matter how many different debts you may have.

4. After you get all of your debts paid off, add to your emergency fund until you have 6-12 months of income saved up. Put that emergency fund money into a liquid money market fund or into a Bank of America no-risk CD so that if you need the money you can take it out without penalty.

5a. When you have your emergency fund in place, add a category for "fun" to your budget. Save for a holiday, a vacation, a big screen, or dinners out, whatever goal you want. Remember to enjoy your life.

5b. When you have your emergency fund in place, start saving for your retirement. Join the 401(k) plan at work and contribute the maximum. Your employer probably matches at least part of your contribution so why give up free money? Open a Roth IRA and contribute the maximum on a monthly basis. If you start saving for your retirement now, you will probably retire a millionaire.

5c. When you have your emergency fund in place, start saving for your next car. Only buy cars, or other things that depreciate, with cash. Save up for a nicer car. That way you get the interest instead of paying the interest.

You can do it and it isn't as hard as you think. Just follow the plan

2009-03-05 23:49:34 by Nene