Debt settlement companies work as a middleman between you and your creditor. If all goes well (and that's a big if), you should be able to settle your debts for cents on the dollar. You'll also pay a fee to the debt settlement company, usually either a percentage of the total debt you have or a percentage of the total amount forgiven.
Jean ChatzkyBy definition, saving - for anything - requires us to not get things now so that we can get bigger ones later.
Jean ChatzkyAfter explaining why you're in trouble, ask the creditor if the company would be willing to accept a smaller amount. Start negotiations at about 30% of the total amount due, with the end goal of paying 50%.
Jean ChatzkyIf you have even a smidgen of doubt that you'll be able to stay away from racking up additional debt, don't do it.
Jean ChatzkyIn about one-third of credit card consolidations, within a short period of time, the cards come back out of the wallet, and in no time at all, they're charged back up. Then you're in an even worse position, because you have the credit card debt and the consolidation loan to worry about. You're in a hole that's twice as deep - and twice as steep.
Jean ChatzkyYou settled a debt instead of paying in full will stay on your credit report for as long as the individual accounts are reported, which is typically seven years from the date that the account was settled. Unlike with bankruptcy, there isn't a separate line on your credit report dedicated to debt settlement, so each account settled will be listed as a charge-off.
Jean ChatzkyDebt settlement companies work as a middleman between you and your creditor. If all goes well (and that's a big if), you should be able to settle your debts for cents on the dollar. You'll also pay a fee to the debt settlement company, usually either a percentage of the total debt you have or a percentage of the total amount forgiven.
Jean Chatzky