How quickly debt settlement program works?

Hi,good day to you too!

Debt Settlement needs a lot of wise movements and long term thinking.You have not mentioned the type or amount of debt that you are undergoing.Thus there cannot be any specific answers to your query.In general there is no fixed time in the settlement of debts.Your debt settlement period depends on several factors like the amount and type of debts you are under;your income level,your bill payment habits and how good a rapport you share with your lenders.

Consolidating your debts means coming to a settlement with your debts.You settle your debts by coming to oblige certain terms with your creditors.Your debt consolidation counsellor negotiate with your creditors and consolidate your debts into one single amount which can be paid in easy installments.

As you know every system has its pros and cons.But going by the popularity of debt consolidation, and the way it has helped hundreds of debt burdened people, I recommend you to go for it.

For detailed information on debt settlement click here.

I think the question that was first asked by Alexxis has not been answered. I wish I had the accurate response, and I am now very curious to know the answer myself. I am also doing some research on debt settlement and have not been able to find whether my credit report would be badly affected and if there are truly reliable companies out there that have successfully done this for others. I am still skeptical. Will settlement have a negative impact on my credit card report? .. .what does it mean in those terms? would I be in a red flag list with a terrible credit rating? ... I have been in credit counseling for two years and my situation is now worse... It has not made a bit of a difference ... Some smart help would be greatly appreciated. Best wishes!

Dear Katherine,

Welcome to debt consolidation care forums, let me explain the role of debt settlement agencies and why they are prefered by creditors.

If the debt is due, creditors wait for sometime and then hand over it to credit collection agencies. Creditors still pay an amount to credit collection agencies, even after a lot of harassment and threatening collection agencies may not get a single penny. Moreover bankruptcy implies unsecured creditors not getting a single penny.

So creditors have a fixed (and variable) schemes for debt consolidation firms known as fair share, creditors give an amount to debt consolidation firms for settling the debts. Here debt consolidation firms are working as collection agencies for the creditors and the best part is, it is starting at debtors end. They welcome this move.

If you can negotiate well with your creditor , then your credit report status will be "paid as agreed". Remember one thing that creditors are getting money through debt repayment not by making your credit report negative. They agree on these issues if negotiated well.

Regards
Vikas

Just a note on Settlements since we have been and are currently going through them now- I made the "mistake" of using a company that is now shut down by the FCC so be very careful when using these companies.

Here is the lowdown of what happened to us-
We were about $25,000 in debt with credit cards only, 8 total, in the service we settled on 3 cards.

The pros: With this company they handled all the phone calls and communication with the credit companies which helped my husband keep his sanity. :? I believe you have forms on this site to contact the companies yourself for this issue, if you have the time and energy to be persistant.

The cons were of course you quit paying to any of the companies so the interest rates and fees continue until it is turned over to the collection agents, in some cases the amount you owe can come close to doubling. Also the settlement company charges an up-front fee, a monthly fee and also a % of the amount settled. Which is a lot of money disappearing for the piece of mind of no phone calls. You take what you were paying to your cards and set it aside in a seperate account. Once you had 50% of what you owe on your smallest card- contact them to settle. Of course most of our cards were well overdue before settlements happen.

And be aware there are companies that will go directly to a judgement- One of ours did, and in that case we set up a payment agreement with the lawyers to keep it out of the courts and adjusted our other payments accordingly.

Since the settlement company closed I have settled one card on my own, providing a verbal offer to the company in a two month payment option- After viewing this site I wish I would have used the written forms and also got our credit cleared in the process, but I will try that with the other cards I have left. If I would have known eliminating the credit record was an option I would have pushed for that a bit more since it does effect your credit rating- Our goal was to get our things paid as our credit rating was already bad with employment and late payment issues already.

If you have the time a patience to do the legwork and paperwork yourself and you have a lot of debt, and a little bit of funds to take care of it this can work for you. We have settled each card for 60% or less of what we owed and look to be free of creit card debt in 1 more year. It is a lot of work, and if you are already in trouble this is a way out without bankruptcy, which is what we were trying to avoid. I think settling and paying something on the debt, is better than bankruptcy and paying nothing in my opinion.
We now have $9000.00 left (settling at 50%) to pay on our debts which we see paid/settled in 1- 1 1/2 years.

Will it effect your credit rating:YES, but with negotiations it can be lessened- and as they are paid off, you will have more piece of mind if nothing else. Do what I did and go back and forget all transactions of your card activity except the settlement letter/payoff note and celebrate!

Will it help pay down debt?
If you are consistent, and can save up/beg, borrow for lump sum settlement amounts or agree to 1-2 payments for payoffs some creditors will work with you- some won't. You can settle for about 50% of what you owe.

Hi Banan05,

Welcome to the debt consolidation care forum. We highly appreciate you for sharing your enriched experience in our forum. This will be of great benefit for people who want to opt for debt settlement.


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Hello. I have 7 credit cards currently enrolled in a debt settlement program. I stopped all payments to them 9 months ago, and the debt settlement company took over contact with them. At first they continued to call me, but in the past 3 months the calls have stopped, and 2 cards have been settled. So far all seems to be going as planned. My credit rating has taken a very bad turn from high 600's to low 500's. The settlement company also has a credit correction program once the debts are all settled. I won't know how that works until I get to that point, but so far I'm happy with the progress. Has anyone out there completed a 3 year program like this?? If so...please share your experience. How badly was your credit hurt? How long did it take to recover? Were you sued during the program?

Thanks,
Kim

NDebt, choosing a debt settlement program is a bit risky decision towards your credit ratings. The creditors report your accounts as 'settled' to the credit bureaus and thus, this negative information will stay on your report for as long as 7 years.

If the consultant can negotiate with your creditors and convince them to report your accounts as 'Paid as Agreed', you will be largely able to retain your credit ratings.

Regular and timely payments towards your debt are the best way to retain your credit ratings. This also helps in increasing the credit scores effectively. Once the negative information appears in your credit report it will stay for 7 years and lowers the scores. So, insist the consultant to convince your creditors so that they don't report your accounts negatively.

No one is sued during the program as long as you are paying towards your debt account. But you should be regularly interacting with the settlement company to know the latest update. Know the latest reaction of your creditors and how much the debt has been negotiated. Also, keep a record of all the monthly installments that you have contributed towards your debt account.

Ben

I am new to the debt consolidation program. The people that I am working with are very nice and always get back to me when I have a question. It is a good relief to not have to worry about which bill I'm going to pay on time this month. Money comes out of my account every Friday and shoots off to the DC Company and I don't need to worry about it. It has actually helped me budget more efficiently because I know exactley how much I have left over from my check every week without worrying about paying 5 different bills at different times. I will share more knowelege about my experience once I get more results which will come with time.

-Sarah :lol:

I am trying to figure out which company is not going to rip me off if I consolidate my debt. Any help?

kks148

You won't get ripped off as long as you keep a watch over your finance and make wise decisions. Being suspicious is good till you don't feel satisfied with the decision made. It's always better to do some research before you give your money to someone working for you.

I also did the same thing before consolidating my debt with a company after registering here. I am glad that this website has partnership with some of the good companies all over the United States. And I am sure, that 90% of the people here are also satisfied after working their companies.

You can discuss your problems with the consultant and make decisions as per your situation. He will provide you monthly statements of how your finance is used towards your creditors and do the needful negotiations to improve your credit file.

I assume that after having a discussion with him, you will be posting your good experiences about the company here. :D

I'm in a debt management program-i recently found out that after nearly a year my interest wasn't lowered that much-and some of my creditors are still charging over limit fees due to interest fees charged putting it there-one creditor from my debt management was put in a collection agency-who told me that little had been paid down and the over limit fees,etc; were actually keeping my balance the same!My concern is now the rest of my creditors balances and interest are not going down either-yet i'm paying $50.00 per month
Now, do i go for another debt management or debt consolidation company-i don't like the sounds and risks of a debt settlement..
i'm 30,000 in credit card business debt.

paying $50.00 per month for the debt managment services that is-

Debt Programs Defined

Below is a basic definition of debt programs being offered by various companies. Benefits and costs can vary from company to company.


Duplicate Content removed as per forums rules - Mike

I to am in a settlement company and I have been it it a year next month. I have not settled any accounts yet, and we went into the program with 25K debt racked up on 8 cards.

I checked the company out with BBB and they had great ratings and they are really nice people to work with. I think I have 1500.00 in my acct saved up. They did not charge up front fees, they took a chunch out of the first 3 payments and then they take the remaining fees out over 15 months in small portions. I will be done with my fees in 8 months and the full 400.00 I pay will go towards my acct.

Pretty much all calls have stopped. Letters still come here and there with threats and all , but I just fax it to my settlement company and they deal with it. I get calls every now and then at work, but these people work on commission so they will stop at nothing. There is always the chance of being sued, but when they pull your assets and look at your situation and see that it would do no good to try to get a judgement...they more or less wait it out and will settle on something so they get something in their pocket rather than have you run and file bankruptcy.

I was allowed to keep one card open, so when I complete the program, they told me to use that card and apply for one more. They told me to charge it up each month on monthly items that we buy and then pay it off each month. They said that by doing this for a couple of months, it will reestablish your credit to a better score than it was before you entered the program. YES, while your in the program your score goes down and will show negative results.

I chose the settlement program becuase it was my last resort. Consolidation was going to do NOTHING to help me. ALL they did was get the interest rates down a tiny hair and it was going to save me a whole 55.00 in monthly payments for 5 years. It was going to be 555.00 for 5 years. I am in settlement program and it was 400.00 for 38 months. So I saved 155.00.

I have enough in my accounts right now to settle 3 cards of smaller balances....but they are not worried about those cards right now. They do not rush out and settle the lowest balance card if that card is not a threat to you right now by threatning court, garnishment or etc. They will continue to let the money accumulate until a creditor is ready to nail you to the wall, THEN they have a balance of money to work with at that time. See, I have 3 cards with 5,000+ balances and they are trying to get ugly, so since i have a fairly good size balance in my acct, they could possible settle two of the ugly cards for what is in my account. This is how settlement companies work. They stall the creditors as long as they can and talk to them--until an agreement is made on a balance.

Good luck.

Linda,

Good to see you on the forums :) I am happy with my debt settlement company as well. It was a hard decision to make but it was the solution for me as well. They have been trying to settle on my first debt for about six weeks now so maybe at the end of the month. It will be such a relief when this happens. I too was able to keep one card open for emergencies but I haven't found that necessary. I haven't used a credit card in nine months which seems like an eternity when I used to use them as a crutch. Good to see you!

What is the name of this settlement company? What state are you in?

I decided to try to settle the debts myself - so far their offers have gone as low as 54% - with that card currently being about 3 months late. I hoping to get to about 40%. I have Chase, Advanta, AMX and Citi I h ave to work with. My question is -- does anyone have any recent settlements with any of these - and do any of these send you to court quickly?

We had similar experiences as Linda. We are very happy with our settlement program. Our program allows us to keep the money in our savings account. They just took out a % of each deposit for the first 10 months. After that the full 700.00 per month is going to the savings account. we have already settled 1 account and I made the payment myself. I like having control of my own money. That seems to be the key.

And for all those people who say that debt settlement is going to ruin your credit. Well in my opinion, my credit was well on it's way to being ruined already. There was no way that we could continue to make min. payments on our 3 cards. Total we had 43,000 in debt and were paying 800+ in min. payments. So will debt settlement ruin your credit? Sure, but we were in a bind anyway, so at least there is a light at the end of the tunnel. Before we joint the settlement program there was no light.