Debt Settlement Online & Debt Consolidation Help & Tips
Articles

Why You Should Avoid Debt Settlement

June 3, 2010 by · Leave a Comment 

When your world is collapsing around you because of debt problems, clutching at straws is all you can do to save yourself. However, the Debt Settlement straw is something you should try and avoid. On the surface, the notion of getting your debt slashed in half sounds great. But the company doing it on your behalf is not doing it out of the kindness of their hearts. There are costs that you should be aware of.

Most of the companies charge a percentage based fee. This can be a based on the amount that has been slashed or on the whole debt itself. More often than not it is decide by the level of confidence the firm has in getting you the discount. For example, if they feel that they can’t get you a good discount then they are more likely to charge you based on the whole debt. When you consider that the norm is to charge 25 percent (regardless of which method is employed), the amount suddenly becomes sizeable.

What most people don’t know is that creditors will often agree to enter into settlement talks on a one-on-one basis with the debtor. When it comes to bad debts, creditors are willing to simply get what they can and move on. It is not an advertised fact so most people don’t know it. As a result they fall prey to these firms. If you are not confident of engaging in settlement negotiations by yourself, employ the services of a lawyer. This cost will almost always be less than getting a firm and it is safer as well.

Comments are closed.