Eliminating Credit Card Debt – Here Is Why You Cannot Afford to Hire a Debt Settlement Firm

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.

A typical consumer in debt cannot afford to pay for debt settlement services AND settle their credit card debts with what is left over. It would cost $2250-3000 to settle some reduction of $15,000 in debt. Debt settlement firms advise you stop paying the credit card companies and to start paying them instead. They take their fees out then wait for enough money to accumulate to make lump-sum payments to the consumer’s credit card banks. But, that typically will not happen until after those debts have been charged off and sold due to non-payment.

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.

Most credit card banks write off, or charge off, bad credit card debt six months after non-payment commences. In that time, indebted consumers cannot save a thousand dollars a month or more to quickly develop a lump sum for a reduced settlement payment. Hence they are faced with seven-year negative marks on their credit reports, as well as collections and possible 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 writes for the Credit Card Debt Survival Guide. If you are searching for credit card debt relief, read about proven strategies for settling debts and handling debt collectors as well as collection attorneys.

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