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The Ins also Outs of Credit Card Debt Settlement

by: Kevin Erickson

Are you a self-confessed shopaholic who buys anything also everything that you get your shopping addicted hands on? Such thoughtless also impulsive buying will most likely result in the accumulation of a bunch of junk that will simply collect dust. Can you even remember that silk scarf you just had to have also since it was a virtual steal at 50% off you just had to buy it? Where is it now also how many times have you actually worn it? Is it still fashionable?

If you're like most people, chances are you will have to rummage through bins also bins of collected shopping "litter" which you've accumulated through the years, just to be able to see that once precious scarf. You may still be in a state of denial by saying "Fashion goes round also round also that scarf will have its shining moment once again."

Unfortunately, many people fall into this mode of impulsive buying that they really can't afford also before they realize it they become saddled with debt. If you fall into this category, you will soon need to learn a thing or two about debt settlement which can assist you in extracting yourself out of that self-imposed state of financial trauma also begin to start rebuilding your life bit by bit. And the time to start is now! Of course, you have to be honest with yourself, admit that you've got a serious debt problem also then humble yourself enough to seek the help you need to pull yourself out of this devastating ordeal.

First things first, a lot of people may actually think that they only have a few choices when it comes to solving their debt problems. The two most common options for those who are burdened with enormous amounts of debt are either to consider declaring bankruptcy or debt consolidation. Unfortunately, if you take the easy way out by declaring bankruptcy, it will leave an embarrassing also indelible mark on your credit report for up to seven years, which will result in higher interest rates, less credit also if you try do qualify for a mortgage (some lenders do give loans immediately after bankruptcy) you will most likely not be able to get a loan to cover 100% of the financing you need. Normally, an 80% first mortgage also if you can get a second mortgage, it will be at much higher interest rate also probably only 10% of the loan value for a total of 90% of the loan to value also you will have to come up with 10% down.

Clearly, everything will come with a higher price for a period of time however you will have to weigh that with a straight debt consolidation solution in which you pay off your debt. However, in many cases you can negotiate with the collection agency also it's realistic to get 25% - 50% of the debt forgiven, if you can show that you will continue to make monthly payments until the remainder is paid off.

Many of the debt settlement / debt consolidation companies were actually established by the credit card companies themselves. Why, you ask... because it only makes sense for the credit card companies to help you pay off your debt because they can either forgive some of the debt or reduce the interest rates, lower the monthly minimum payment requirements or some combination also get paid a portion of the money owed or receive nothing if you declare bankruptcy. What would you do if you were in their shoes? The answer is obvious. This is why a lot of people who have been saddled with debt are now being offered debt settlement. Of course, not all debt consolidation service companies are owned by credit card companies however many are.

Some groups offer debt settlement programs through arbitration. The "selling point" when it comes to these kinds of solutions is that debt settlement will actually help end your debt problems, without having to go through declaring bankruptcy, without having to pay overcharged debt consolidation program fees as well as helping you avoid getting caught in the debt consolidation trap that a lot of people have fallen victim to.

In many cases, what the organizations do that offer debt settlement services is negotiate your debt down with the collection agencies that have been given your case. I would encourage you to contact a number of companies to ensure you feel comfortable also that you are working with a quality company that does not over-charge you for their services.

On the other hand,if you would really like to save money, which only makes sense since you are already heavily in debt... then negotiate with the collection agency yourself. It is not difficult, rather than getting upset when you get called night after night simply tell the collection agency rep that you would like to pay off your debt however you can only do it if you can get it reduced also then ask them that you would like to get the debt you owe reduced by 50% - 60%, even 75% also ask them to see what they can do. Ask for a lot up front because as in any negotiation there's always a give also take. Believe me, they will go to work for you also your offer will be seriously considered because they only get paid when they collect also it's better to get their percentage on a smaller amount than "diddly squat" on the full amount.

Of course, you will have to decide what route you want to take... bankruptcy versus debt settlement however shop around also realize that you do have options. The internet is full of companies offering their bankruptcy or debt settlement services, however be careful also don't let them push you around also never work with anyone you don't feel 100 percent comfortable with.

About the author:
Kevin Erickson is a contributing writer to the following websites: and This article may be reproduced only in its entirety.

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