July 21, 2009
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Debt Settlement, Pt.2
Making the Right Choice.There's no question that bankruptcy might be the only solution for some consumers who have gone over the top in large credit card and loan debt. However, for those looking to find a good debt settlement agency to help negotiate a fair settlement and manageable monthly credit card payments, following a few simple steps will put their minds at ease. I suggest you begin by visiting the National Foundation for Credit Counseling (NFCC) or Association of Independent Consumer Credit Counseling Agencies (AICCCA). Both agencies are very reliable, have a set of standards that can be trusted, and have the resources to refer you to an honest credit counselor. Also, most consumers don't understand that they have the option of calling their credit card company directly to negotiate. Most lenders are very open and willing to settle directly with the consumer.
Even though you have taken the time to contact the NFCC or AICCCA, you should still be aware of some red flags. Before signing any contracts, be sure to investigate what legal repercussions you have if the arbitrator should fail to fulfill his responsibility in reducing your debt. Some contracts eliminate your right to sue the credit card company if you are not satisfied with their response. Also, be cautious of any agency that charges large upfront fees or asks you to stop making your monthly credit card payment. Look for agencies that charge little or nothing. When talking to an agency representative, pay special attention to the following points:
Don't believe the agency if they tell you arbitration will not affect your credit history. Your debt settlement agreement will damage our credit report and score. An agency that tells you that debt settlement is not damaging is not trustworthy. Thanks, but no thanks to them. Lastly, if the agency claims they can eliminate all of your credit card debt, they too are being deceptive. In debt settlement, you are still responsible for your debt. Lenders are more likely to negotiate no or lower interest and fees while you are paying back what you owe.