Not even sure if I’m doing debt settlement. Just researching. Some say, your credit goes back up after you pay off the debt settlement amount in an average of 2-3 years. While on some articles I’ve read, it remains on your credit file for up to 10 years? What are the implications on your credit?
How much do these agencies normally charge? Just afraid with scams.
Сredit repair workеd fine to fix my credit. They disputed and removed lots of bad items from my credit report. I used this service – creditreport.imess.net
Most of the debt management programs on TV usually recommend the non-profit CCCS. It is rated A+ by the BBB but I don’t have any idea how good they really are.
http://www.consolidatedcredit.org/
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If you are in debt settlement you are automatically denied any new credit until you exit debt settlement. In some cases you aren’t even allowed to use your credit cards. Debt settlement stays on your credit record for at least seven years. I know for me when I was trying one the fees are pretty steep and if you can’t afford to put all of your unsecured debt with them then you might as well file for bankruptcy which is what I ended up doing.
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All debt settlement companies are ripoffs at best. Think about what they do, and realize that you can easily do it yourself.
They tell you to stop paying all your credit cards, and put money into an account that they monitor. They use that money you deposit (minus their fee) to negotiate with your creditors. They make you think that there is some kind of special skill involved in this process, but there not.
The only reason your creditors are willing to settle is because you haven’t paid them in a year. If you do this on you own, your creditors will be just as willing to settle with you and you won’t have to pay a big fee to a ripoff debt settlement company.
Many times you won’t even have to instigate the negotiations with your creditors. After 6 or 7 months of not paying, they’ll be sending letters offering you 50 and 60% settlement offers. If you put effort in it, you can get them as low as 25%.
While you’re not paying your creditors, put the money that you used to pay them into a savings account. You’ll need ready cash to do these lump sum settlements.
These ripoff debt settlement companies typically charge you 10% of whatever debt they settle. That means if they settle a debt for 50%, you’re really only getting a 60% settlement after their fee.
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You can settle your debt with the companies yourself. Save your money and pay off your debts. Start by offering 40-50% of debt owed and go from there.
It looks better on your credit report that it is paid even if for less than owed. If it is showing late or over the limit every month that will hurt your credit more. It will help your credit in the long run, but can stay up to 7-10 years on your report.
In some cases depending on what state your in, if there is no activity at all on the account you can have it removed sooner. Each state has different regulations on those time limits.
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Debt settlement and debt consolidation are two different things. Debt consolidation is a good thing. Debt settlement is a very bad thing.
If you are just going to stop paying your cards for a year and then settle for less than the amount owed why pay them at all? Think for a minute…your credit does NOT improve one iota from having a collection account with "paid" underneath it. Plus, if you settle, it won’t even say "paid". It will say "settled". What that shows potential lenders is that yes, this is legitimately your account and that the lender in that case had to settle for less than was owed.
At least if it said nothing you could argue it wasn’t yours.
Pay the minimum each month whenever possible. If you care about your credit report at all do not go into debt settlement. If you can, look into a low interest debt consolidation loan to cover the amount of your current debts. Your credit is worth protecting. You never know when you will end up needing it.
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Andy doesn’t know what he is talking about… Sorry Andy, the only thing you got right is that a charge off (bad debt) can stay on your report for 7 years.
You can get credit while doing a debt settlement, unless your credit score is to low and that is the reason for denial or manual review when a bank thinks that you are to high of a risk because you are late or in default on other accounts.
But this is done in any bad credit situation. It has nothing to do with being in a debt settlement program. Also you can get credit via a secured credit card, which I would recommend.
As far as not being able to use your credit cards… again you don’t know what your talking about. You have a contract with the bank that issued your card and you can use it when you wish. I will say though that the bank may changes the terms, close your account, or lower your limit on a whim… I know sucks!
But this is because of non payment or that they deem you as a risk, not because you are in debt settlement!
As far as the fees, I can see your point. Some places practically rape you and take advantage. But if you consider that you are only paying anywhere between 40 – 70 cents on the dollar, some places have a good deal and their payments in some cases are less than the interest you would pay each month
*** Note *** that is if they actually settle the account for you!
Just be sure that if you are going to a debt relief company that you research then thoroughly and get all details you can about the company and their program.
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http://creditrestorationexpert.com
Сredit repair workеd fine to fix my credit. They disputed and removed lots of bad items from my credit report. I used this service – creditreport.imess.net
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i have to admit i haven’t read everyones answers, but.. YES debt settlement hurts your credit because you’re being showed as a slow pay while you’re in a program, however, once you settle up with everyone, it’s " settled zero balance, paid in full".. a GOOD settlement co. will make sure there is no deficiency balance.
Here’s the thing that MOST people don’t know. You can do "Credit Repair" once everything’s settled. You can either find a company to do it for you, or you can do it yourself. Basically, you write a letter to each of the credit bureaus stating that those marks weren’t supposed to be there, and they’ll take them off.
the creditor has 30 (i think.. maybe it’s 45, i’ve heard different things) days to respond to the bureau and verify that it’s correct..
the kicker is that, if you don’t OWE them anything, they WILL NOT spend the time and money to chase you down and make sure it gets put back on there when they have thousands of bigger fish to fry.. it works 99% of the time. Chances are, if you have 15 unsecured credit cards you’re wiping off, 1 of them may respond. It’s absolutely worth a shot regardless..
as far as settling, despite what anyone says, don’t do CCC or consumer credit counseling. it’s basically a soft bankruptcy. They put a TPI on your credit score which is a third party intervention. that FREEZES your credit for 7-10 years and you are unable to get a credit card, loan, etc until that time is up. they may tell you that they don’t put them on there, but….. if THEY don’t then chances are your CREDITOR will.. and 99% of the time just because their non-profit doesn’t mean anything. they’re run in the interest of the credit card companies and often owned or affiliated in some way to them. non profit just means that they don’t show a profit. which means more money in THEIR pockets personally. make sense?
as far as settlement, there are other things to watch out for. be sure to find one who is IAPDA certified, and check the Attorney General in their state to make sure they don’t have a class action lawsuit pending. 14 of them do…
many others will be going out of business in January because of legislation passed to weed out the scam artists…
There’s a lot to think about. Honestly, I work for one of the best one’s, but i’m not at liberty to say which… I’d be glad to elaborate on the pro’s and con’s of BOTH services.
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I work for one of the best debt settlement companies, and have done a lot of independent research on all models of debt elimination.