First off debt settlement is not to be confused with debt management AKA credit couseling. Wher as debt settlement companies will take your UNSECURED DEBT(not tied to any collateral i.e. cars, houses, rvs, etc.) and reduce the balance, debt management works with your creditors to lower your interest rates, so that more of your payments go toward your principal. How debt settlement works is typically a debt settlement company will contact your creditors on your behalf and renegotiate the BALANCES on your debt down to 50% or less. You are also usually given one interest-free monthly payment which is required for you to save up every month. This program is recommended for those who have a great amount of debt that will likely not be able to be paid off. If you feel that the debt you have is manageable but can afford the minimum payments a better option might be debt management.
As previously stated, Debt management works with your creditors to lower your interest rates so that more of your payments are applied toward principal balance. Your payment is approximately the same as what you are already paying, however your term is reduced to approximately 36-60 months. This is ideal for someone who is current on their payments, but can ony afford making the minimum payments.
BEWARE- there are numerous individuals/companies posing as debt settlement companies that obtain an upfront fee to work on your debt and do absolutely nothing. A few tips- 1) Ask if they are a member of TASC (The Association of Settlement Companies). Being a member requires background checks as well as regular compliance checks to verify that the company has integrity. 2) See all the programs that they offer. Ask if they have any attorney-based products which are a plus. This means that an attorney acting on your behalf will negotiate with your creditors. This method usually ends up with more favorable results. I hope this post clears up some questions regarding debt settlement and I wish you good luck. Remember, there are those that make things happen, there are those see hings happen, and there are those that wonder what has happened.
A good company I'd recommend would be Envision Debt Solutions. They are one of the 157 Active members of The Association of Settlement Companies and they specialize in all aspects of Debt settlement including Attorney-based, Non-Attorney based debt settlement as well as Mortgage renegotiation services. You can contact that by calling 800-515-9603 or you can go to their website at: www.envisioncreditsolutions.com.
