Eliminating Credit Card Debt - Here Is Why You Cannot Afford to Hire a Debt Settlement Firm
Sunday, 06 December 2009 08:09 | 
Written by Matthew Highlander
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.
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.
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.
Debt settlement firms do not deliver what they promise, according to MSNBC. Some banks will not even work with debt settlement firms, according to the Wall Street Journal.
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.
Junk debt buyers buy bad debt from credit card banks in large chunks for 10 cents on the dollar. If a consumer has continued paying into a debt settlement program, by the time there is money for a reduced settlement, the original creditor no longer owns the debt. Then it is time to use consumer protection laws like the Fair Debt Collection Practices Act to fend off these parasites, according to the Credit Card Debt Survival Guide. If the consumer is unwise enough to settle with the junk debt buyer, the debt buyer will simply sell the unpaid balance to another junk debt buyer who will resume collection efforts.
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.
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.
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.
Debt settlement firms do not deliver what they promise, according to MSNBC. Some banks will not even work with debt settlement firms, according to the Wall Street Journal.
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.
Junk debt buyers buy bad debt from credit card banks in large chunks for 10 cents on the dollar. If a consumer has continued paying into a debt settlement program, by the time there is money for a reduced settlement, the original creditor no longer owns the debt. Then it is time to use consumer protection laws like the Fair Debt Collection Practices Act to fend off these parasites, according to the Credit Card Debt Survival Guide. If the consumer is unwise enough to settle with the junk debt buyer, the debt buyer will simply sell the unpaid balance to another junk debt buyer who will resume collection efforts.
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.
About the Author:
Matt Highlander researched the Credit Card Debt Survival Guide for consumers seeking to educate themselves about credit card debt relief. Matt Highlander is a contributing writer.