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Becoming Money-Smart: Working With A Debt Settlement Company To Handle Our Credit Card Debt

One of the more popular ways to get out of debt is to do a credit card settlement. After all, paying your credit cards of by making just the minimum payment can take up to 20 years…sometimes more.  However, debt settlement companies  can help you deal with the credit card companies for at least 75 percent of your overall debt and pay it off in as little as three years.

What Is Debt Settlement?

This is the process is which you negotiate with your creditors, convincing them to lower your overall debt that’s owed to them. What you’re looking to do is convince them that getting some of the money you owe is better than them receiving nothing if you were decide to file for bankruptcy or default on the debt.

There are quite a few companies that have settlement services. These places will negotiate with debtors like Mastercard, American Express or Visa for you and go through a “re-aging” method. This method will bring all accounts into current status.

Once you reach a settlement, you’ll begin making monthly payments to that settlement company who will then forward your payment to the credit card company until the debt is completely paid off.  There are several benefits to going with a debt settlement company:

1 – One payment every month
2 – It’s easier to budget
3 – Your credit rating will improve

There are several companies that do debt settlement services. However, you need to do a little research before you sign up. Bear in mind that there are good companies and there are not so reliable companies.  Be sure you do the following things before you sign up with a debt settlement company.

1 – Check with your city or state’s Better Business Bureau to ensure there have been no complaints.
2 – Talk with the company’s customer service department. If you’ve got questions, you want to ensure that you’re happy with the responses you get and that you can easily reach someone. When searching by the Internet, you can’t judge them as easily by the website alone.
3 – Use the Internet to do some research. Conduct a Google search for any reviews for the company. Use those reviews as a guideline.
4 – Check the most recent Consumer Reports issues to locate reviews for credit card debt assistance companies.

The most important thing you must understand is that debt settlement requires you become self-discipline.  You must make the monthly payments and you cannot spend that money elsewhere. Most settlement companies will do a debit from your bank account each month so you don’t have to remember to make your payment.  This works for most folks since self-discipline was not there when the debt increased.

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