9 Thoughts on how does credit card debt settlement work?
  1. Reply
    v b
    August 3, 2011 at 5:10 am

    It *destroys* your credit.

    The firms will tell you to send them all of your bills and your payments. They keep their “fee” and put your money into an account. They do NOT pay your bills. This destroys your credit and leads to you being inundated with collection calls.

    Then at 6 months, the firms approach the creditors and offer 50-60% to “settle.” If the firm bites, they pay them and tell you, hey, we saved you 40% (and they take another fee).

    Later (sometimes *years* later), you get a form 1099-C for the same 40% that was settled because the IRS views this as taxable income to you.

  2. Reply
    LocalBoy
    August 3, 2011 at 5:16 am

    Yup, V B is correct. But with all the money ur saving from not making ur monthly payments can be put away into a savings account to pay towards IRS during tax season, or u can arrange a payment plan with them if ur not able to pay it all at once. Let me know how it goes cuz im thinking of doing that also. =*(

  3. Reply
    Reggie
    August 3, 2011 at 6:10 am

    It’s really hard. Now with the credit market the way it is you may not get anything if you don’t have a semi high credit score.

  4. Reply
    Edaphos
    August 3, 2011 at 6:24 am

    Settlement works as long as you do it yourself.

    You’ll have to call your creditors and ask them to send you a settlement offer. You should aim at settling for about 50% of your debt. They may offer 70%, then you say 30% and so forth.

    Make sure the offer is in writing and establishes you are clean and free after you pay.

    When you negotiate, you want to present your finances in such a way (without lying) that makes it seem that if they sue you, they won’t recover much.

    Do research online before you call them.

  5. Reply
    Zoe S
    August 3, 2011 at 7:11 am

    As you know, debt settlement is the process in which you stop paying your creditors for some time and save that money so that you can then
    negotiate with them to settle the debt for a lesser amount.

    If you are in serious debt, debt settlement is a much better option than bankruptcy. A bankruptcy will be listed and hold your credit score down for 10 years, while the delinquent payments incurred while enrolled a Debt Settlement program will be there for only 7 years (and in some instance, even less). So at a minimum, your credit report will be cleared at least three years earlier when using Debt Settlement company as opposed to bankruptcy. Another important factor to remember is that a typical debt settlement program ultimately resolves your debts for much less than other debt relief options. And, unlike bankruptcy, you won’t have to sell your house or other assets in order to free yourself of your liabilities.

    It is better to seek help from any reputed debt settlement company. Such companies can handle it properly as they are experts in that field. I took help of freedom debt relief to get rid of my debts. I have joined their debt reduction program one year back and now I am almost debt free.

  6. Reply
    Alexandra
    August 3, 2011 at 7:12 am

    When you choose debt settlement, you withhold payments from your credit card companies, intentionally defaulting on your account, if you have not already done so. By doing this, you hope that at some point your credit card issuers will be willing to settle for much less than what you currently owe them, at which point you will need to be able to offer them a large lump-sum payment. You can do this on your own or hire a Debt Settlement Agency to guide you through the process. It can absolve your debts, but if you haven’t already defaulted on your credit card, doing so will seriously damage your credit score and there’s no guarantee that your credit card companies will be willing to settle. If you have already defaulted, debt settlement will not affect your credit score any further.

  7. Reply
    Carly
    August 3, 2011 at 8:08 am

    Hey dude…i can explain you how credit card debt settlement works.It’s a process through which you negotiate with your creditors to pay off, or settle all your outstanding dues at a reduced amount that will be regarded as a “payment in full”. This usually helps you save about 40-60 % of your total debt repayment.

    So don’t wait to get debt solution. Please visit this site.

  8. Reply
    ton l
    August 3, 2011 at 8:42 am

    before you make a decision on what your going to do you should look at your options. If you apply for free quotes at http://www.ineedaquote.webs.com they will let you know that best decision to make

  9. Reply
    Anthony
    August 3, 2011 at 9:19 am

    Yes, it does temporarily destroy your credit. I work in debt settlement. We take the money you give us, and put it into a trust account. Then once you get to a decent amount depending on the amount of debt you have, we will negoiate the debt down. We settle for usaully 50%. The problem is that you arent paying your creditors you are paying us.But then the creditors will get paid, and everyone will be happy. And we also offer credit repair. Email me if you want to learn more!

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