<--ARH--> Paying for debt settlement will not eliminate .Credit card debt. <--ARH--> [...]
There are so many debt settlement firms advertising their services that we believe their claims. Sadly, when they promise to eliminate credit card debt, they deliver little or nothing for the money they have collected from already stretched consumers.
A typical consumer in debt cannot afford to pay for Debt settlement Services AND settle their credit card debts with what is left over. It would cost $2250-3000 to settle some reduction of $15,000 in debt. Debt settlement firms advise you stop paying the credit card companies and to start paying them instead. They take their fees out then wait for enough money to accumulate to make lump-sum payments to the consumer’s credit card banks. But, that typically will not happen until after those debts have been charged off and sold due to non-payment.
According to the New York Times, creditors will not negotiate reduced balances with consumers who are still making monthly payments and balances on credit cards with missed payments swell with interest and fees. The Wall Street Journal reported that some major creditors, including American Express Co., say they won’t even work with debt-settlement companies. Yet, debt settlement firm’s fees are all non-refundable.
The problem is most banks charge off credit card debt after six months of non-payment. If you cannot save enough money within six months of starting the program, then your credit card debts could charge off, leaving a seven year negative mark on your credit report. With a charge off and subsequent sale to a junk debt buyer there is no more leverage with the original creditor, the credit card bank, to negotiate away a negative credit report listing.
After the charge off of bad debts the credit card banks sell large blocks of those debts to junk debt buyers for around 10 cents on the dollar. The buyers of this junk debt will then attempt to collect on these credit card debts. It is better for the consumer to demand the return of their money and to use consumer protection laws like the Fair Debt Collection Practices Act to fend off, rather than attempt to settle with these scavengers. At that point, that is the best strategy to eliminate credit card debt, according to the Credit Card Debt Survival Guide.When it is all said and done, DIY-do-it-yourself is the way to settle credit card debt for reduced lump sums. That way the consumer has control of the situation and their best chance to Eliminate credit card debt .