I am over my head in credit card bills. So many companies are advertising about debt consolidation and debt settlement companies. Could someone help me decide which way to go. I am never late on my payments because sometime I use one card to pay another. I like the settlement plan because they say the credit card companies will settle for less, but they want 1/4 of what they are saving me. Could I negotiate myself with the card companies. Any help would be great. Thank you :( ?

Maureen,

Yes, you can negotiate with your creditors. If you decide to negotiate and settle an account, the creditor will usually settle for no less than 40% of the balance. Some will knock the accumulated interest off if you set up a payment plan and pay consistently for a set amount of time.

Example:
Say you owe Providian financial a principal balance of $1000.00. Your total balance is $2000.00 because of the added interest. The creditor may settle for you paying $125 for 4 consecutive months. If you pay as agreed ( and not late), Providian may zero out that debt once the fourth payment is made. You have only paid 500 dollars for a 2000 dollar bill. The creditor alleviated that 1000.00 worth of interest and acctually settle with you for 500 based on the fact that you made the effort to conact them, pay your debt and pay it on time.

Thanks for you help. I have called 2 cards and they have lower my interest rate. I do pay on time. I would like to know about debt settlemet companies ? Do you know a good one that would work with me, or should I called back the cards myself and ask for a settlement figure.

Maureen,

I would suggest that you call the companies yourself. You can negotiate the settlements. Although there are companies who will do this, they will receive a fee for something that you can do yourself. They are listed as non-profits but they still make money. The creditors pay the debt settlement agencies.
Another reason why I would advise you not to enter into a plan with lets say Consumer Credit Counseling (CCC) is that if you go to purchase a home or refinance, that debt consolidation is viewed in the same light as a Chapter 13 Bankruptcy by most lenders. I am a Senior Loan officer for a national company. I specialize in credit repair. If you have any more questions, please feel free to respond.
You can do it! It may take you a coulple of calls, but it is worth it. ;)

Stay away from settlement. Those companies will get you sued. Better not to pay and clean up your credit.

You can't just call and negotiate. They won't even talk to you until the account is charged off. I suggest going through 3 collection agents internal (until you get the Sr reps involved who have authority) or 2 collection agencies.

Make sure you mark all correspondence as an offer to compromise NOT an offer to pay, bring an account current or renew an alleged indebtedness.

Jon
[email protected]

The preceding is not legal advice, is not from a licensed debt counselor, and is not provided to persons from states which providing such information requires a license.

PS: I am also a mortgage broker, but STAY AWAY FROM CCCS or consolidation.

Consolidators work for the creditors on commission, if they even ever call your creditors - or the creditor even honors this verbal agreement.

CCCS and licensed credit counselors are proxies who are indoctrinated by the credit system for creditor's rights. I know their uses, and they are few: Any budgeting advise they give you can get from a book. They are professional guilt-trippers who have been mind-altered to de facto represent a creditor.

Whilst I have not. :)