Question about debt settlement

That's right. And sometimes the companies that you are late on will sue you before you have enough saved up for a settlement.

If you are struggling now you should do some research on a debt management company instead.

Get real! He just said he doesn't have money for settlement.....didn't you read his post? Bankruptcy seems your only option my friend.

Here are your two main options.

Options # 1 debt management Program or dmp

I usually suggest looking into this type of program first if you can afford the payment. It will get you one payment but at much lower aprs " usually around 6-10 % "and thus get you out of debt much faster than on your own. The down side is if you are overextended you will most likely not be able to afford the payment for a dmp. If you are overextended and can't afford this type of program than you may want to consider a hardship program called debt settlement.

Option # 2 Debt Settlement

Debt Settlement is a hardhsip program and best for consumers who are overextended and can't afford their minimum payments , can`t afford a DMP and don`t want to file bankruptcy.
Debt settlement will get you one low monthly payment around half of what you were paying and will get you out of debt in around 36 months or less. If you are so overextended to where you can`t even afford debt settlement than you most likely best option would be bankruptcy.

Answers to your other questions

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Thank you mobile That is why I said debt management. It would probably be easier for them than the settlement.

Plus BK is the last resort. It is not the easy was out. I am having a hard time paying my bills right now due to disabilty but you don't see me running to a BK attorney. If I can't do this on my own I would go to a management company over a settlement company.

puddle....there is a huge difference from settlement to management. If you can't pay your bills, a debt management company is going to charge you to be an administrator for nothing. Debt management is for people who can pay but don't know how much they're paying (interest, fees) and won't some help cleaning up their credit. Maybe you should have a private discussion with mobile.....maybe he can help you...possibly give you a loan.

Guest,

I have checked into both types of programs. I almost at one time fell for the settlement program. I would have gotten sued from a couple different companies before I even had enough money for the settlement company to settle the accounts. So instead of going with settlement, I worked with those companies and settled it on my own.

The management company I was checking out at the same time could lower my monthly payments to my creditors and would only charge me $30 a month for their services and also could lower my apr's with my creditors.

But like I said I did it on my own. I DO NOT need nor want a loan from anyone. I am just waiting for my disability checks from my employer. And all my creditors right now know that and are working with me (just for your information)

But if let's say you have a credit card with a 15k balance, you'll need to be saving up for a long time to have enough to settle. Especially that the settlement firms say that you'll be making smaller payments than you do now. If I make smaller payments than my minimum credit card payments, it'll take me many years to save enough to settle. And if I'm not making credit card payments during that time, I'll certainly get sued.

I was arguing against both. I am doing this on my own and all of the creditors are understanding right now....90 days past due.

The amount you are settling for is much less than your balance, that's why you end up paying less. The settlement company (or you, if you do it yourself) negotiates a deal with the credit card company - say you have a 15K balance - the company, or you, can try to get that down to 6K (which is 40%). If you are lucky, you may even get it for less than 40%. If you settle yourself, you can negotiate the payments on that 6K as to length of time to pay it off, monthly payments, waiving penalties and fees, etc. If you have a company, they do the same - see how much you have in your account, how many months it will take to pay that off, etc. Then you move on to the next one. Either way, with settlement, you are generally doing one account at a time, and yes, you can get sued, especially if you have a creditor that doesn't want to wait until you have funds available. But if you don't have too many accounts, and if the creditors agree to monthly payments instead of lump sums your payments CAN be much less. Of course, the higher and fewer the payments to reach the end settlement figure, the sooner it's settled and the sooner you can start repairing your credit!

^ Don't creditors settle for less under the condition that you pay in a lump sum? I've never heard of a company agreeing to a 40% settlement AND a monthly plan.

I've read, on this post, about people who went to debt settlement Co's and REALLY lost ALOT of money. The Debt Settlement Co not helping them, the Co's NOT paying when they said they did, etc. Also...( I agree with the comment someone made..) you would probably have to pay a fee just to get help. In my opionion, I would work with ( or try to, anyway..) the CA's myself. That way you're NOT paying a fee, to a Settlement Co, etc. I've settled a 'small' debt with someone already. Can someone answer this question for me? If you settle on an account, how long does it stay on your CR? How long does it take to 'bounce' back from a settlement?

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It's most likely a settled amount would have to be made in one or two payments. I've read that some people were lucky to get more; I was offered one with six payments but the settled amount still wasn't as low as I would've liked so that account is still being negotiated. Two cards I have are being spread out over ten months in my settlement program. If you want to continue making the payments over a LONG period of time, most likely you won't get a settlement but could very well qualify for another option with lower interest rates, the waiving of late fees, etc. I've been offered those as well. sdchargers, you must have read a lot of posts about people in settlement programs that are happy with them, too. Yes, they charge a fee, but in my case I had so much debt, I wanted professionals helping me out. I am very satisfied with my program and the company handling it.

we tried to work out deals with the credit card companies ourselves with no luck. All any of them would reduce it was 80% and they wanted it paid in full. I finally told each one of them, if i had that amount of money laying around i would not be in the situation. So we went with a settlement co. no problems, we are just 2 months away from having the amount to start negotiations on our first account. And yes we are being sued by one of the companies. It actually was originally the card we owed the least on and would have been settled first. But the settlement co. helped us with the paperwork to drag it out legally to buy us time to collect the money. We got a small amount of money as a gift and tried to settle yet another credit card on our own, with no luck again. So we added it to our settlement program and dumped that money into our account. We have the savings account at our bank. We control it. Honestly that makes more since to me than sending it to the co. to hold. It is in my control. And yes, i am going to leave it alone. But i know that if for any reason i feel i am being cheated, i can get my money out asap.
good luck

I struggled with this question when I was looking into my options. I would have to agree that I would never use a debt settlement company but that is just my own personal choice. I read TONS of posts by members here that had a lot of problems with debt settlement companies. That was enough for me. There were some that had great results but the majority were stories from people who did it on their own. Debt settlement CAN be done on your own. I stopped paying my cc's in December and offers have been coming in for months. I don't talk to these creditors. I don't ask for the offers. I will say that every situation is different. I see it in my own home. My husband will get a good offer from the same creditor I have but they wont offer me even close to what he gets offered. I also know a few people who have settled and were able to break up their amount in payments. I will tell you though-do not try the debt settlement route if you don't think you will have the funds available to settle. Like previously posted, there are chances for lawsuits.

I don't knock debt management. I think it is a great program but it too can be done on your own. Some people do need help and I am glad that that option is out there.

Yes...SUSIEQ, I HAVE read alot of good experiences, from settlements/det consoladation companies. I HAVE been looking around for some 'good' ones. Maybe I haven't found the right ones, yet. However.....I know some people have ALOT more debt than I do.....that's for sure. I guess it depends on what 'works for you.'

I have done some research on this whether to go through a debt management program or not. I think the best bet is to do debt settlement on your own. the key to it is to have money in the bank so that when you get a settlement offer <50% you jump on it. If you have 50k debt atleast have $25k in the account for negotiating power. The other thing is if you have $25k then why settle? the answer is by missing payments for 4-6 months you save the money and put aside towards that $25k.
Hope this helps. I am right now going through similar situation , please check my saga here: http://www.debtconsolidationcare.com/settlement/citibusiness-amex.html

Thanks

I agree. If you CAN do settlements on your own, I would. But...yep..the options are there to help. It may take a while, but, I want to try to do this on my own. Ok...debts stay on your CR for 7 years. What about the SOL's of debts? In PA it's 4 years. Shouldn't the debt stay on your CR for 4 years, instead of 7 years? Some of this stuff confuses me.