Debt Settlement or Negotiation Companies.
They charge you thousands.
They do not pay any of your bills.
This is to cause creditors to become nervous to settle.
meanwhile you rack up interest and late fees and destroy your credit for years.
Most companies refuse to settle and take you to court anyway.

Get a book on debt and credit repair from your bookstore.
It will tell you step by step how to negotiate, settle, reduce interest rates, or set up payments.
It also will tell you how to do the pay on delete correctly.

Why pay a company a thousands dollars to do something you can easily do yourself?
If you are in real trouble contact a non profit agency.
Find one at NFCC.org and make an appointment.
Max charge $25 / month.
/Do NOT go through some company that promises they will erase your bad credit or fix it for you for a price.

If you really are serious about getting your debt under control and paid off find a local chapter of http://www.nfcc.org. They are non profit and will work with you and your creditors to put together a plan to get your debt paid off in a reasonable amount of time. And, best of all, it is FREE.There are some legit places out there like www.thebestincredit.com. They help restoring your credit, establishing credit, and getting out of debt period. If you need anymore assistance, visit my blog, www.rikkibnews.blog.com. I hope this helps!Forget debt settlement companies. They will take your money and trash your credit.

Check into an NFCC credit counseling service: http://www.nfcc.org/. These are legit, non-profit companies that offer debt management programs for a nominal fee. They negotiate lower interest and payments so you can pay off your debt. When you complete the program, you will have decent credit.There are legitimate services to help with your debt. Which type of help you choose is a matter of your own financial circumstances, how much you owe, and your goal. Before you decide the most appropriate course, you must answer this question: WHICH IS MOST IMPORTANT TO ME?

Option 1: Becoming debt-free as quickly and inexpensively as possible, or

Option 2: Protecting my credit rating as much as possible while paying off debt, though it may take 2-3 times as long and cost me 2-3 times as much.

If you answered Option 2, and protecting your credit is more important than getting out of debt as quickly as possible, you should look into credit counseling, as some of the other posters mentioned. But don’t be fooled by their non-profit status- they’re closely aligned with the credit card companies, and will try to build a debt management plan (DMP) designed to ward off bankruptcy while helping the creditors collect 100% of the balance, plus (a reduced rate of) interest. The trade-off for not affecting credit scores as greatly as some other alternatives, is that you will pay much more and be in debt much longer. Credit counseling may also be a good option if you don’t have a large amount of debt (saving just a few thousand dollars may not be worth the damage that your credit would likely sustain using other options).

However, if you have a great deal of debt, and just want to get out of debt as quickly and inexpensively as possible, then credit counseling is not your best option. I’ll explain using examples:

Borrower #1 owes just $5,000 in unsecured debt. A debt management plan (DMP) through credit counseling may be a good solution if he can afford the payments. He’ll end up paying back the full $5,000 balance plus interest, plus fees to the credit counselor- but his credit should not sustain as much damage as had a debt settlement company withheld payments from his creditors, hoping to force a settlement. In this case, a settlement may have only reduced the balance by $1,000 – $3,000, which is small consolation for having his credit score trashed. Plus, fees to the debt settlement company would likely consume a good portion of those savings. But let’s look at a different example…

Borrower #2 owes $70,000 in unsecured debt. Let’s say the DMP is able to reduce her interest rate to just 5%. On a 60-month plan, her payment (not including fees) would be $1,321. That comes to a total of $79,260 (plus fees) to pay that debt at the reduced interest rate under the DMP. Her credit will be damaged while she’s in the program, but not as much as under other types of debt reduction. But at what cost? Assume another type of debt reduction program is able to resolve her debt for 45% of the balance, with no additional interest. That $70,000 debt is able to be eliminated for just $31,500. And with that same $1,321 payment as the DMP, her debt is eliminated in just 24 months (compared to 60 months in the DMP). So her credit is hurt for 2 years, but she’s now debt-free, and has 3 years to repair and rebuild it by making all her payments on time.

So let’s look where she would be after 5 years under each. With DMP, she has just made her last payment (totaling $79,260 plus fees), is now debt-free and emerging from her damaged credit profile. Under the other program, her credit shows that she WAS behind on payments 3 years ago (which impacted her credit score), but has been debt-free and making timely payments for the last 36 months (which has helped to rebuild her credit). Oh, and by the way, she saved about $50,000 by choosing this option. Many would argue that the temporarily damaged credit was a small price to pay for saving $50,000 and getting out of debt 3 years sooner.

You can see it depends on your individual situation whether a DMP through credit counseling is a good idea. If you only owe a small amount, it may be a good option. But if you have a large amount of unsecured debt, you’ll want to weigh the additional cost of the DMP versus the savings that you can achieve through another option.

I AGREE WITH THOSE WHO ADVISE YOU NOT CHOOSE DEBT SETTLEMENT, but for different reasons. You see, even if you do (somehow) find an ethical debt settlement company – there is a far superior alternative: DEBT RESOLUTION. The concepts are similar, but because Debt Resolution is an attorney-managed program, it provides valuable benefits and consumer protections that debt settlement companies simply can’t offer, and at a lower cost. There isn’t room to elaborate on the differences here, but here’s a quick summary:

> 55% REDUCTION IN BALANCE OWED – Guaranteed Results (try asking a debt settlement company for a guarantee)
> Attorney-managed negotiated resolution means NO TAX CONSEQUENCES (a settled account will result in the creditor issuing a 1099 to the borrower)
>STOPS COLLECTION CALLS – attorney-managed process leverages good faith debt laws to protect the borrower (debt settlement companies can’t do this)
>LOW & TRANSPARENT FEE STRUCTURE – $500 1-time enrollment fee to establish paperwork, trust account and compensate attorney for efforts to cease collection calls, etc.. ALL OTHER FEES ARE INCLUDED IN THE 45% DEBT RESOLUTION AMOUNT.

For more info on Debt Resolution, visit http://www.BetterThanDebtSettlement.com

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