subject: The Truth About Debt Negotiation Companies [print this page] If you watch TV you've seen the adsIf you watch TV you've seen the ads. The ones that tell consumers how they can pay off their credit cards in just a few months, no matter how much they owe. Most of these ads are for debt negotiation companies.
Sadly, many of these ads are misleading. Not because there is anything wrong with the process of debt negotiation in itself. But because these ads make it seem like the right solution for everyone - which it is not!
Debt negotiation involves working with your creditors to pay off your debts for less than you owe. Sounds good, right? That's because it is. But just because you have too many credit card bills doesn't mean they'll let you off the hook, and let you pay off your bills at a discount. It is a process designed for those who are truly in trouble, and in most cases offers both sides a better alternative than bankruptcy.
So, what is The truth about debt negotiation and how it can help you get out of debt? Here are 6 points about the process of negotiating your credit card debts that most people don't know (and the debt negotiation companies don't usually tell you!)
1-It is a perfectly legal way to get out of debt, but it is not an overnight solution.
2-It is designed for someone who is already behind in their payments, and seriously considering bankruptcy.
3-If you can make your payments, it will hurt your credit (because you will need to stop paying to gain the leverage needed to negotiate).
4-It takes time to negotiate a settlement, so you may still get calls from your creditors.
5-It takes money to pay off the final agreed upon amount. If you don't have enough money already saved up, you'll need to find a way to get enough money for the settlement (some companies may help you save up enough money.)
6-You will need to pay taxes on the amount saved (for most people, this is still far better than paying interest, late fees, and being stuck in debt for years. But most companies don't tell you this up front).
If you're struggling with debt, it's a good idea to explore all of your options. And once you decide on the right option, make sure to check out the company you decide to work with very carefully. There are several ways to do this:
- check with the Better Business Bureau
- research the name of the company online (by typing "company name" into Google.com)
- ask lots of questions and read the fine print BEFORE signing anything or sending in any money
Like most things in life, if it sounds too good to be true, it usually is. And getting out of debt is no different. There are many good debt negotiation companies that will help you through the process in the right way. The key is to find the good ones.
